Russia Might Ban Cryptocurrency as a Means of Payment

cryptocurrency as a means of payment

Bad news for crypto enthusiasts in Russia: According to a report by Izvestia, the Russian government is preparing a ban on using cryptocurrency as a means of payment with sources saying that the central bank of Russia and the Ministry of Finance are supporting this move.

At this point, it is still unclear what exactly the regulators are planning, and no official draft has surfaced either. However, according to the rumors, there are fears that violating the proposed law could lead to penalties of 5-8 years in prison. The sources of the rumors also stated that the mentioned reason behind criminalizing cryptocurrency payments was the fight against crime and money laundering.

However, another possibility might be that this new law is meant to weaken decentralized cryptocurrencies such as bitcoin in preparation of the launch of a state-backed Russian cryptocurrency.

Currently, anyone can use cryptocurrency as a means of payment for services or to get paid for their own services. Especially freelancers in Russia make use of this option and get paid with cryptocurrencies instead of FIAT. Once this law goes into effect, it would suddenly be illegal for Russian freelancers to accept cryptocurrency as a means of payment.

The Russian central bank has already expressed that, if the law should get approved, it would support the regulators in their efforts:

“If a decision is made to ban cryptocurrencies as a means of payment at the level of legislation, we consider it appropriate to support this position.”

Cryptocurrency supporters in Russia are, however, doubting the practicality of a ban of payments with cryptocurrencies citing that the enforcement would be difficult. The possible largely unenforceable new law would therefore have to be limited to a few demonstrations to convince the public not to disobey.

Others like Antonina Levashenko, head of the Russia-OECD Center for RANEPA, also fear that such a ban could create a gray market outside of the regulator’s control.

What do you think? Is the possible new law a bad thing for the crypto industry or just another sign of the inevitable rise of cryptocurrencies all around the world?

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