Russia rejects bitcoin, but wants to invent digital currency knockoff

TAGs: Bitcoin, Blockchain, Jasmine Solana, Paul Livadniy, Russia

And the bitcoin plot thickens.

Russia rejects bitcoin, but wants to invent digital currency knockoffIt has been widely reported that Russia, particularly the Ministry of Finance of the Russian Federation, is hell bent on totally outlawing digital currency and anyone who deals in it in the country. But a recent report has revealed that the government is considering the possibility of replacing bitcoin with its own knockoff virtual currency.

Last week, Russian-language newspaper Kommersant reported that the government is planning to introduce a “national regulated cryptocurrency” in place of bitcoin.

The news outlet cited Paul Livadniy, deputy director of the Russian Federal Financial Monitoring Service (Rosfinmonitoring), who said the idea of introducing cryptocurrency is already being discussed with representatives of banks at the meetings in the Ministry of Finance and the Central Bank.

If Russia’s plan pushes through, the country will soon see a government-sponsored and monitored digital currency. Unlike popular digital currencies such as bitcoin, the Russian cryptocurrency will not be “emission-free,” meaning its issuers will have legal responsibility over the use of the currency because they will be required to register first with the government.

The issuer, according to the report, can be “financial organizations that will be entrusted with the emission of cryptocurrencies.” There is a strong possibility that the said organizations will be subjected to licensing, Rosfinmonitoring said.

Companies and Russian locals will also be required to undergo identification “to minimize anonymous transfers before they can exchange rubles and other fiat currencies for the regulated virtual currency at government-sanctioned “specialized electronic platforms.”

The Ministry of Finance has been very vocal in opposing bitcoin, which was outlawed in the country in 2014. The ministry has been working on a draft law that seeks to punish those who use bitcoins and engage in digital currency trade and mining activities, but that bill has met strong opposition from the Ministry of Justice, who challenged the proposal’s “lack of precise definition for money substitutes or ‘surrogates.’”

The ministry might not be a fan of bitcoin, but financial officials said its underlying technology—blockchain—“has potential relevance… for the development of e-commerce.”

Undeniably the king of cryptocurrencies today, the price of bitcoin continues to climb this week, achieving a high $546.23 on Tuesday morning, while daily transaction volume reached $108.91 million with a total of 199.96 million bitcoins in available supply.


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