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Russia Bans Bitcoin

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#1 +techbeck

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Posted 07 February 2014 - 19:54

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.

 

http://techcrunch.co...a-bans-bitcoin/




#2 FloatingFatMan

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Posted 08 February 2014 - 08:00

Good! Don't blame them in the slightest. This stupid "currency" needs to be controlled, or outlawed.



#3 Thrackerzod

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Posted 08 February 2014 - 08:18

Good! Don't blame them in the slightest. This stupid "currency" needs to be controlled, or outlawed.

 

Why do say that? How is it more stupid than any other currency and why does it need to be outlawed? Just curious.



#4 heslo

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Posted 08 February 2014 - 08:35

Good! Don't blame them in the slightest. This stupid "currency" needs to be controlled, or outlawed.

 

People fear what they don't understand.

 

As to the concerns of the Russian government that its citizens may take great losses when involved in the currency; use the old saying.... only risk what you can afford to lose



#5 Torolol

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Posted 08 February 2014 - 08:38

WebMoney a russian based online payment, also providing bitcoin account for their customers.



#6 +zhiVago

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Posted 08 February 2014 - 09:42

There's a number of virtual currencies operating in Russia.

 

The law being mentioned here has existed since the early 1990's. It's not new.

 

In a nutshell, both the Central Bank of Russia and the Prosecutor General have warned the Russian citizens that if they use bitcoins and then find out that the value of their accounts has evaporated, they won't be able to seek damages in Russia's courts. In this case, being outlawed means precisely this. It doesn't mean that Russia's police will all of a sudden start arresting Russian citizens who use bitcoins or confiscating their bitcoin accounts.

 

And those e-commerce payment systems (webmonbey, yandex.money) still have some sort of reporting to do with the authorities; at the very least, it's tax-related because those ventures are properly registered legal entities, operating according to the law.

 

With bitcoin, it's all beyond the reach of the authorities. So if any shady activity takes place there, a Russian court order will be powerless. This is the logic here.



#7 Riva

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Posted 08 February 2014 - 09:57

Everyone asks why. The online currencies are too volatile and their value in real money is based on their volume of daily transactions so they will get incredibly high and incredibly low fast. Not to mention the vast amount of money that will be lost when you buy expensive. And Russia is anti-globalisation.



#8 FloatingFatMan

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Posted 08 February 2014 - 14:08

Everyone asks why. The online currencies are too volatile and their value in real money is based on their volume of daily transactions so they will get incredibly high and incredibly low fast. Not to mention the vast amount of money that will be lost when you buy expensive. And Russia is anti-globalisation.

 

Their value in real currency? Pfft.

 

When I can go down to a store and buy something with them, or an online retailer that people have actually heard of, takes the things, THEN they'll have some value. Until then, they're just worthless numbers.



#9 KingCracker

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Posted 08 February 2014 - 14:11

Their value in real currency? Pfft.

 

When I can go down to a store and buy something with them, or an online retailer that people have actually heard of, takes the things, THEN they'll have some value. Until then, they're just worthless numbers.

You probably don't like the NBA and you can't go to a game for obvious reasons but the Sacramento Kings excepts bitcoin as payment for tickets. That's a step towards acceptance. If bitcoin really takes off you can trust that online retailers will jump on the bandwagon. 



#10 FloatingFatMan

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Posted 08 February 2014 - 14:21

NBA? Basketball?  Pretty much a nowhere sport over here. :p

 

I guess one place taking them is a start, but I think i'll be a long time before any major retailers take them. Hell, most don't even take PayPal...



#11 KingCracker

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Posted 08 February 2014 - 14:23

NBA? Basketball?  Pretty much a nowhere sport over here. :p

 

I guess one place taking them is a start, but I think i'll be a long time before any major retailers take them. Hell, most don't even take PayPal...

Paypal isn't currency though. Bitcoin is a unique case so we'll see how far it will go.  



#12 Thrackerzod

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Posted 08 February 2014 - 19:10

Their value in real currency? Pfft.

 

When I can go down to a store and buy something with them, or an online retailer that people have actually heard of, takes the things, THEN they'll have some value. Until then, they're just worthless numbers.

 

TigerDirect and Overstock.com accept them and many other online retailers, and more are coming all the time.



#13 +MikeChipshop

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Posted 08 February 2014 - 19:54

When I can go down to a store and buy something with them, or an online retailer that people have actually heard of, takes the things, THEN they'll have some value. Until then, they're just worthless numbers.

 

True, it's in its infancy with the major players but thousands of the smaller shops (and even some of the smaller larger (?!) stores) accept them.

Currently it seems to be more tech based products such as web hosting, but it's getting there. China has even reversed it's decision to ban their use which original caused a drop in worth.

 

If any one is looking to get in to BTC, right now's a pretty good time as both Russia's decision, Apples removal of the Blockchain app and MGTox having technical difficulties, has got a few people panic selling and you can pick up BTC for around £460 p/btc

 

For the UK users, this is a pretty good list if you're looking to do some spending of BTC http://coindex.co.uk/

 

Also, London just installed the worlds first BTC ATM... 



#14 winrez

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Posted 08 February 2014 - 19:54

I personally don't use Bitcoin but to be fair isn't most our modern currencies based on worthless numbers and have been since they are not backed by anything.

 

 

Wonder if Apple had a heads up about this so iPhones weren't restricted.


Edited by winrez, 08 February 2014 - 19:57.


#15 Don't Feed the Wolfie

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Posted 08 February 2014 - 20:56

the fact that bitcoin and other derivatives are so controversial speaks to its relevance and somewhat increase in use.