Russia doesn’t do things by halves — Bitcoin can no longer be used by individuals and legal entities anymore. If you have a Bitcoin wallet on your computer, you are now breaking the law. The Central Bank of Russia reiterated that the official currency is the Ruble, and that it considers Bitcoin a money substitute. That’s why the cryptocurrency is now banned.
The reasons behind this move is that Bitcoin is reportedly used for money laundering and other criminal activities. Moreover, the Russian institution thinks that it’s a purely speculative currency and that there is a great risk of value losses.
Yet, banning Bitcoin doesn’t mean that people will stop using Bitcoin overnight. As Bitcoin doesn’t rely on any physical institution but the network of miners around the world, you can’t prevent Russians from using Bitcoin.
But companies that are based in Russia and are working in the Bitcoin industry should at least consider relocating. They will probably be the first target of the Russian government.
While harsh, this decision shouldn’t come as a surprise. Bitcoin was designed to be unregulated. But over time, many countries and official institutions have decided to try and regulate it.
For example, in August, a federal judge in Texas has declared that Bitcoin is a currency and should be regulated just like euros or U.S. dollars.
Similarly, New York’s financial services stated that Bitcoin companies should respect the current financial regulatory guidelines. By doing that, the authority wanted to protect Bitcoin holders and companies. Moreover, New York’s top banking regulator is currently writing a new set of rules to decrease illegal Bitcoin activities.
Finally, following a parliamentary inquiry, Germany stated that Bitcoin should be considered as “private money.” It has many implications, starting by paying sales tax (VAT). This rule is hard to implement, but it gives an idea of how the German government feels.
For all these reasons, Bitcoin won’t be able to remain an unregulated currency for long. In Russia, today’s ban is another step in that direction, and it’s a radical step.