The Russian Federal Security Service (FSB) and the Bank of Russia have agreed to ban cryptocurrency payments in Russia, and it remains possible that they will enact even stricter measures, Bitcoinist reports.
The move comes against a backdrop of an increasingly shaky Russian economy, which may explain the somewhat surprising decision, the news outlet writes.
The Bank of Russia is actually pushing for a complete ban of anything cryptocurrency related, making cryptocurrency completely illegal, but despite the agreement, the FSB acknowledges that a total ban of cryptocurrency is not tenable.
Indeed, if cryptocurrency were completely banned in Russia, it would instantly become a lucrative black-market industry. Cryptocurrency is cryptographically secure, immutable, instant, and anonymous, especially privacy coins like Monero (XMR). Even Bitcoin (BTC) transactions can be made completely anonymous if a virtual private network (VPN), Tor, or a mixer is used.
The FSB’s proposed solution is to authorize specialized operators who will offer exchange services between crypto and fiat and to identify all crypto users.
If this proposal becomes law, anyone who holds crypto, even if they don’t use it, will have to go through an intensive identification procedure and would receive criminal penalties if they do not comply.
In other words, crypto holders and users in Russia would have to give up their anonymity, and if they don’t, they could end up in jail.
This means the future of cryptocurrency in Russia is between a rock and a hard place. Either crypto will be totally banned as the Bank of Russia wants, or it will be legal to hold, mine, and exchange crypto, but not use for payment. As well, users will not have the right to anonymity.
Notably, this law will not pass until spring, so the Russian crypto space will have an uncertain future until then. That being said, the Chairman of the State Duma Committee on the Financial Market is 99% sure this law will be passed, and it is clear this law will at least neuter the functionality of cryptocurrency in Russia, if not totally make it illegal.