The Russian government has had an internal discussion about the proposed law for “surrogate money” and recommends the regulators to consider the introduction of criminal charges for using and producing cryptocurrencies, the Russian news agency Interfax reports.

In the second half of 2014, the Russian Ministry of Finance introduced a bill that would effectively ban bitcoins. The text of the bill proved problematic due to the term “surrogate money” not being defined clearly. The Ministry had to call the bill back and introduce a new version. This spring the regulator promised that the bill banning “surrogate money” will be signed into law by the end of this year. However, over the summer the situation changed. The Central Bank of Russia became much more favourable towards cryptocurrencies and the Russian president Vladimir Putin admitted that digital currencies could be used for "some operations".

Now bitcoin in Russia is under threat of a ban again. Last week, the Russian Government held a meeting on the project of the bill. Consequently, the Ministry of Finance was appointed to develop the bill further and to present a reworked version to the Government by 5 October. Additionally, the Government approved of the law presented earlier by the Ministry of Finance that would authorise banning cryptocurrency producing websites before a court decision.

The Ministry of Finance and other institutions are recommended in collaboration with the Central Bank “to examine the question of the appropriateness of introducing criminal responsibility for emission of surrogate money, including cryptocurrencies, as well as for creation and distribution of the software for the emission, and for transactions using money surrogates,” an unnamed source from the economics and finance division of the Russian Government told Interfax.

Last week, the FinTech forum in Kazan revealed a growing interest of the Russian state regulators, including the Central Bank, as well as commercial organisations in bitcoin. The discussion of bitcoin attracted a lot of attention in the media.

Aliona Chapel