Russia’s attitude toward Bitcoin and cryptocurrency has quite a storied history, but it has recently taken a more definite turn toward strict regulation. In a recent statement, Nikolay Nikiforov, the head of the Russian Minkomsvyaz (Ministry of Communications and Mass Media), said that Russia will “never” give Bitcoin legal status as a part of its economy.
Bitcoin is Forbidden, but Blockchain is a Possibility
“Bitcoins are a foreign application of Blockchain technology, and Russian law will never consider them as a legal entity under the jurisdiction of the Russian Federation,” he declared (as quoted by the Russian publication Interfax).
The statement came at Duma’s first Russian National Youth Forum, where Nikiforov spoke casually with journalists. He stated that although Bitcoin is out of the question, blockchain adoption by the Russian government was “entirely possible.”
Russia Cracks Down on Crypto, but Hopes to Profit from Mining
In mid-October, the Russian government announced that it would be banning access to cryptocurrency exchanges. By the end of October, Russian President Vladimir Putin had issued five presidential orders demanding that Russian officials create a legal framework for the taxation of crypto miners, and the regulation of ICOs, among other things.
How the FX Industry Can Benefit from Outsourced ITGo to article >>
According to a report from The Verge, the orders also called for the “formation of a single payment space”, a request that likely refers to the CryptoRuble, the proposed Russian national cryptocurrency.
The Russian share of the cryptocurrency market is so small at this point that any major news coming out of the country will likely have a rather insignificant effect on the global cryptocurrency markets. However, this may not always be the case; the Kremlin announced plans to outpace China in the crypto mining industry earlier this year.
Steps to become a crypto mining hotspot are already being taken. In a recent report from Bitcoin.com, the governor of Russia’s Leningrad region extended an open invitation to crypto miners to create mining farms there; 40 countries also submitted applications to apply for the ability to mine Bitcoin in Russia.
The rather mixed messages that Russia has been sending its citizens and the world with regard to cryptocurrency are certainly confusing. Given the Russian propensity for censorship and control, the deregulated nature of cryptocurrency certainly does not fit in with the country’s ethos. However, the country may still have much to gain financially if it can position itself as a global mining powerhouse.