Russia bans Bitcoin use

E-commerce

by CBR Staff Writer| 10 February 2014

In addition to Russia, China and Norway have already banned the use of Bitcoin amid fears of illegal money laundering.

Russia's Prosecutor General's Office has reportedly warned against use of Bitcoin, claiming, the virtual currency could be used for illegal money laundering or financing terrorism.

The Russia's Prosecutor General's Office said in a statement to Reuters that systems for anonymous payments and cyber currencies that have gained considerable circulation, including the most well-known, Bitcoin, are money substitutes and cannot be used by individuals or legal entities.

"Citizens and legal entities risk being drawn -- even unintentionally -- into illegal activity, including laundering of money obtained through crime, as well as financing terrorism," the agency added.

The agency also ruled that Russian law specifies that the Rouble is the only official currency and that the introduction of any other financial units or substitutes would be unlawful.

Working in collaboration with central bank and other law enforcement agencies, the Prosecutor's General Office, is tightening policies and prevent the use of 'pseudo-currencies'.

The Bitcoin community in the United States, far more developed than the one in Russia, has already come under intense scrutiny as authorities crack down on illegal activity carried out using the digital currency.

In January, Russia's Central Bank (CBR) notified citizens against using virtual currencies, and issued a statement that virtual currencies are unlawful as per Article 27 of the federal ruling 'On the Central Bank of the Russian Federation.'

In addition to Russia, China also banned all the financial institutions including banks from handling Bitcoin related transactions, while the Norwegian government also snubbed to distinguish Bitcoin as a valid currency.
Despite fears of money laundering, about 100 Bitcoin ATMs are set to be rolled out in Australia, Auckland and New Zealand for virtual currency vending.

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