Russia has recognized the increasing popularity of Bitcoin and its potential to solve a range of issues plaguing the current financial system. The country which has been against the use of cryptocurrency for transactions within the country is now planning to assign a legal status to the digital currency to pave the way for a more structured crypto-ecosystem in the country.
Russia’s move to recognize the legitimacy of Bitcoin as a currency closely follows the recent developments in Japan where cryptocurrencies are now legal mode of payments. Assigning a legal status to Bitcoin as a currency not only makes it much easier for the community members to use the cryptocurrency for a wide range of applications, including payments for their daily needs, it also brings in more accountability, opening doors for newer regulations governing the use of Bitcoin in the country.
Reports indicate that the Russian Finance Ministry is preparing for a new financial revolution, starting sometime next year. By recognizing Bitcoin and other cryptocurrencies as legitimate currencies, the country also intends to implement regulations against money laundering and illegal transfers. Alexey Moiseev, the Deputy Finance Minister of Russia, described the extent of regulations the country plans to implement in the sector by saying,
“The state needs to know who at every moment of time stands on both sides of the financial chain. If there’s a transaction, the people who facilitate it should understand from whom they bought and to whom they were selling, just like with bank operations.”
The government’s vision to monitor all transactions and parties to these transactions seems a bit overreaching and with various blockchain analysis tools, it has become quite easy to do so. The financial governance and regulatory bodies are expected to take a decision regarding Bitcoin’s legal status in the next few months. Once the decision is finalized, the concerned departments and ministries will start drafting new regulations and compliance requirements for Bitcoin platforms and the cryptocurrency community.