Russia continues its harsh stance on bitcoin

21 October, 2015

In a continued wary stance when it comes to bitcoin, Russia's media watchdog has recently warned a tech news site that it must either edit or completely delete an article related to bitcoin.

The article in question was published approximately two years ago. Roskomnadzor, the executive body of the Kremlin responsible for supervising mass communications, gave the news site three days to take action and warned that if appropriate action was not taken, access to the site would be blocked. The article in question, entitled "What Are Bitcoins and Who Needs Them?" served as a basic introduction to the cryptocurrency and the history behind it.

Russia exhibits pattern of suspicion regarding digital currencies

Over the last year, Russia has become progressively critical of the digital currency and this latest warning was certainly not the first time that the country's media watchdog has issued warnings against any online content related to Bitcoin. Earlier in the year, Roskomnadzor blocked access to a number of Bitcoin-related sites throughout the country.

In the past, Russian President Vladimir Putin has remained silent regarding bitcoin; however, he recently changed that pattern by making his first public comment regarding cryptocurrencies during a live televised broadcast. While Putin was supportive of the Russian Central Bank exploring technology, he was quick to point out that there are still too many unknowns regarding the digital currency. Specifically, the president appears to be concerned that the cryptocurrency is not really backed by a commodity.

According to Russian authorities, bitcoin and other virtual currencies have too much potential to be used for financing terrorism and money laundering. As a result, the country has outlawed treating bitcoin as a parallel currency. Citing Russian laws, which stipulates that only the ruble is the official currency of Russian, authorities have been clear to point out that the introduction of any other type of currency is illegal.

To date, the Russian Central Bank has not demonstrated much interest in exploring various forms of technology, even going so far as to say that bitcoin is highly speculative and that the cryptocurrency is too risky in terms of losing value. At the same time, the Prosecutor's General Office has stated it is working with law enforcement agencies in order to tighten regulations and ensure that any legal offenses committed through the use of digital currencies are prevented.

In principle, the Russian president has stated that the country is not necessarily opposed to digital currencies, yet the many issues associated with the cryptocurrency are simply too many to be overlooked at the moment, according to Putin.

While Russia seems determined to relatively unsupportive of cryptocurrencies, advocates of bitcoin have pointed out that a Russian ban will ultimately only hurt consumers and entrepreneurs in the country. Although those in Russia stand to lose significantly, the profits that could have benefited Russia may ultimately find their way to other countries that are more welcoming to the use of digital currencies.

Possible hope for the future

Despite the strong stance Russia has taken against bitcoin, there could still be hope yet. For instance, in China, the government also placed a ban on financial institutions using cryptocurrencies; however, Chinese companies have once again begun to use bitcoin.

Other countries, including the United States, have remained largely positive regarding bitcoin. Although the FBI led the closure of Silk Road and ultimately filed a case against the founder of the online drug bazaar that accepted only bitcoin for payment, the U.S. law enforcement agency has stated that the virtual currency is not actually illegal and could even have legitimate uses.


1) Reuters. Russian authorities say Bitcoin illegal