Bank of Russia Issues Warning on Digital Currencies
Recent sub-zero temperatures may have paralysed parts of Eastern Europe, but they haven't done much to slow down the Bank of Russia, the country's central bank.
On Monday, the bank issued a statement on the use of digital currencies. It resembled similar warnings issued by regulators in Asia and Europe over the past few months, so the pattern is very familiar.
points out that these currencies aren't backed by a state entity, that they are speculative in nature and that trades are carried out on virtual exchanges are "high risk". The statement goes on to warn citizens and businesses, especially financial institutions, about the risks associated with digital currencies like bitcoin.
In addition, the bank warns that issuing alternative currencies in the Russian Federation is prohibited:
The central bank also pointed out that the anonymous nature of digital currencies, and the unlimited range of actors who use them, could lead some people to break the law unintentionally, as they could unknowingly aid those who use such currencies for money laundering or even terrorism.
Involvement in such transactions and exchange services will be considered as "potential involvement in the implementation of suspicious transactions" in accordance with existing legislation on money laundering, as well as counter terrorism legislation.
The warning will no doubt leave many Russian bitcoin enthusiasts scratching their heads. It comes just days after Sberbank CEO German Gref publicly backed digital currencies in Davos, saying they are an interesting global experiment and that an outright ban would be a "colossal mistake".
Sberbank
is owned by the Bank of Russia, which makes the timing of the statement rather odd to say the least – it sounds rather like a case of damage control.
Saint Basil's Cathedral Image via Shutterstock
DISCLOSURE
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
