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Apr 12

Russia Considers Recognizing Bitcoin in 2018 to Fight Money Laundering

The Plan to Recognize Bitcoin
The Bank of Russia is considering regulating cryptocurrencies including Bitcoin as a tool to combat money laundering, Bloomberg reported. Moiseev said in an interview: The authorities hope to recognize bitcoin and other cryptocurrencies in 2018 as they seek to enforce rules against illegal transfers.

The central bank is developing a joint position on digital currencies together with the government. “The plan to legalize and monitor Bitcoin is taking shape as traditional schemes are drying up,??? according to the publication, citing non-cryptocurrency methods of “dubious operations such as fake trades and loans used to move money abroad dropping by half to $771 million last year, according to central bank data.???

Rocky Past
Russia has gone through several periods of alternating appreciation for and conflict against Bitcoin, even considering an outright ban of cryptocurrency in the country punishable by jail time for holding bitcoins.

In February 2014, Russian authorities issued warnings against using Bitcoin that cite how it could be used for money laundering or financing terrorism, adding that treating it like a currency is illegal. Last May, Russia’s central bank revealed its plans to create their own digital currency, while once again considering banning others including bitcoin. That December, however, a federal tax service letter implied that cryptocurrencies are not illegal but its status was unclear.

Moiseev himself has also sent mixed messages regarding Bitcoin in the past. Last summer, he considered Bitcoin mining illegal while taking the stance that bitcoin could be traded similar to foreign exchange (forex) markets. Then, in January, he stated that he did not view Bitcoin as a threat.

In February, Bank of Russia Deputy Governor Olga Skorobogatova said that the authorities would decide if digital currencies can be considered an asset, cash or security by mid-2017.

Meanwhile, bitcoin trading volume in Russia is on the rise at Localbitcoins. Last week over 342 million rubles, worth roughly US$6 million, were traded for bitcoins on this exchange alone.