Bank of Russia looking to legalize Bitcoin

In an interesting move, the Bank of Russia has changed its stand on the idea of Bitcoin and signals it

In an interesting move, the Bank of Russia has changed its stand on the idea of Bitcoin and signals it is ready to legalize the cryptocurrency and fully allow its use as a legitimate currency.

While Bitcoin may not have the brightest of histories, legalizing its use can give the bank the ability to closely monitor and regulate its use throughout the region.

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“We advocate a careful approach to bitcoin and are monitoring the situation along with the Bank for International Settlements. One can’t ignore this instrument, maybe this is the future,” stated Georgy Luntovsky, the Bank of Russia’s Deputy Chairman to Russian news outlet Gazeta.ru.

In the beginning of this year in January the Bank of Russia issued a statement strongly discouraging residents to steer clears of Bitcoin due to the anonymity factor behind it, claiming it can result in illegal activities such money laundering and financial terrorism. Other claims such as its high risk value were also mentioned.

Is Russia now approving of Bitcoin as no future sanctions can be imposed in time of a crisis?

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Given the payment situation as of late in Russia as a result of the crisis in Crimea, left us to wondering. Is Russia now approving of Bitcoin as no future sanctions can be imposed in time of a crisis?

In March, after being warned by the US government not to invade the Ukraine, US sanctions forced the 2 largest card companies, MasterCard and Visa, to freeze out Russian accounts. Since then operations have returned partly to the region, leaving the firms to now comply with Russian restrictions to prevent such a “freeze out” from happening again.  A partnership with China UnionPay has also been reported, in order to build a national payment scheme intended for Russian card holders only.

The legitimate use of Bitcoin as a recognized and regulated currency would not give any other foreign authority the ability to freeze funds or accounts. Recognizing Bitcoin is also a highly more affordable approach, eliminating the need for local payment infrastructures, as Bitcoin has its own integrated payment network.

 

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