Russian regulators have had a love, neutral & hate experience all combined into one with Cryptocurrencies as of late.
In September, the stance of the finance minister of the Russian country was that “there is no sense in banning cryptocurrencies” and went on to reveal plans that would put in place a regulatory framework for the use of cryptocurrencies within the country instead of banning by the years end.
The minister Anton Siluanov showed how Russia would do an about face on their long term stance of preparing to outlaw it and make the whole process illegal, proposing to making all aspects from mining to the acceptance of payments fall under an illegal stance. The tone in September was that of, instead of outlawing it, we will go ahead and integrate into the economy and we will accept it within the bounds of the law that we set.
“The state understands indeed that cryptocurrencies are real. There is no sense in banning them, there is a need to regulate them.
Individuals or firms looking to buy virtual currencies will have to register themselves under soon-to-be-enforced laws that will also detail a procedure for buying bitcoin and other cryptocurrencies” said Siluanov.
They would have looked at “the purchase of cryptocurrencies as similar to the purchasing of stock securities”.
But then things changed, either that, or some people didn’t get the memo because we started seeing conflicting messages.
In October, we heard reports stating that Russia will block Bitcoin exchange websites.
Where Sergei Shvetsov, the first deputy governor of the Central Bank of Russia (CBR) stated that Russia will block access to websites belonging to exchanges and trading platforms offering cryptocurrencies like Bitcoin.
The central bank official called the nature of Bitcoin “dubious” and not worthy of retail or institutional investors. He stated:
We cannot stand apart. We cannot give direct and easy access to such dubious instruments for retail (investors).
The reasoning is based on safety and the security of the capital of these investors.
We think that for our citizens, for businesses the usage of such cryptocurrencies as an investment object carries unreasonably high risks.”
Then, sometime later, we were able to hear from RT on the statements of the top man himself, Vladimir Putin, and his being diametrically opposed to the crypto space in general. RT reported, Putin believes digital currencies could be used to finance terrorism, evade taxes and launder money, and that Bitcoin itself is a pyramid scheme.
Bitcoin manufactures “opportunities to launder funds acquired through criminal activities, tax evasion, even terrorism financing, as well as the spread of fraud schemes.”
Following his suit, the central bank and others also made similar statements.
“We have seen how Bitcoin has transformed a payment unit into an asset, which is bought in order to obtain a high yield in a short period of time. This is the definition of a pyramid.”
We are now seeing a continuation of this line of thinking with the head of Russia’s Ministry of Communication ((Minkomsvyaz) stating that the country will “never” legalize Bitcoin within its economy.
The minister added that even though the specific application of bitcoin was to remain outside the bounds of the law, that blockchain would be seen and treated as a different entity, adding that the adopting of the blockchain technology would be “entirely possible”.
“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 Interfax.
But in a further twist of events the man who the government appointed to be a liaison between the government and tech companies, is now building a “9,000 square meter warehouse is where boxy Soviet cars used to roll off the production line. But instead of boxy soviet cars, it now houses “tall shelves [that] are stacked with computer processors jutting out into the middle of the space, spewing gusts of hot air.
Marinichev is currently building what’s called the Russian Mining Center, a project he hopes will put Russia on the cryptocurrency map.
So far, Marinichev and his partners have invested $10 million dollars into the project. They’ve also raised the equivalent of $43 million in an Initial Coin Offering — the cryptocurrency equivalent of an IPO — and plan to add around five times as many “mining computers” to their facility by the end of the year, according to CNN.
Why would the liaison between the government and tech companies dive into a space that seems like it could be shut down any minute by his government? That seems to be irrational to it’s very core.
It’s an interesting political landscape, but as we’ve seen with China, despite push-back from the government, BTC has resisted concerns and continues to grow.