The Russian Finance Ministry is preparing to introduce legislation next month that would fine and jail digital currency users, according to Bloomberg. The Legislation, which was amended last month, has miltiple tiers of penalties depending on the persons usage, according to Interfax, a Russian news agency. For regular citizens who casually use bitcoin, a penalty is 500,000 rubles($7,800) or four years in prison. For organized groups, like bitcoin miners who confirm transactions on the network, its 1 million rubles($15,500) or six years in prison. Executives or managers of financial institutions would face a fine of up to 2.5 million rubles($38,000) or up to seven years in jail.
Russia wouldn’t be the first country to go after bitcoin users. Iceland,Ecuador, and Vietnam have each banned the currency in some way. Digital currencies like bitcoin boast properties that spook central banks and regulators. Crypto currencies allow for anonymous transactions, which could be used for the trading of illicit goods and services.
“Bitcoin can be used to finance the shadow economy and crimes, and this risk we cannot allow in Russia’s financial system, which we are striving to make transparent and healthy,” Russian central bank’s press division told Bloomberg.
“The use of money surrogates, including crypto currency, carries a high level of risk, and creates the condition of the involvement of citizens and companies in illegal activity, including the laundering of financial proceeds from criminal and terrorist operations.”
The renewed push to criminalize crypto currency usage outright by MinFin still runs in contrast to the position or the Central Bank, which has thus far advocated a wait and see approach to any legislation. Russian attitudes towards the legal status of crypto currency have in general been mixed, creating a patchwork of uncertainty with industry players unable to speculate on what the future might hold.
Russian President Vladimir Putin conversely stipulated that Bitcoin could be used in some account, leading to rumors of an ultimate softening of the official position.
“As an accounting unit, these coins or whatever they are called, they can be used, and their adoption becomes wider and wider. As some kind of unit in some account, probably, it’s possible,” Putin said.
Meanwhile, payment processor QIWI announced it was developing a blockchain tech based bitcoin alternative knows as Bit-Ruble; which it says will likely launch in 2016 for use in payment services attached to its mobile wallet, Vesti adds.