Bitcoin regulation to be discussed with Bank of Russia

Russia’s central bank will meet with the country’s financial market representatives to discuss bitcoin regulation next week, according to Izvestia, a prominent Moscow-based news outlet.

Izvestia explain that the Bank of Russia will be loyal to digital currencies and the Bitcoin Central Bank will authorise transfers and payments to individuals and interconnect them.

Even though bitcoin has faced negative reception in recent times, the meeting will consolidate new cryptocurrency regulations and guidelines. This news follows after reports last month about Russian courts overturning a ruling about blocking sites with information about digital currencies, after scrapping plans to ban bitcoin operations altogether.

In January 2014, Russian legislation reacted against bitcoin as monetary surrogates are forbidden in the country, according to Article 27 of the Federal Law. “On the Central Bank of the Russian Federation (Bank of Russia), the release of the Russian Federation is prohibited monetary surrogates,” according to the law.

Because of this law, Russia’s central bank warned against the use of virtual currency as it would be perceived as suspicious because of the involvement of cryptocurrency with money laundering, crime and terrorist financing in the past.

However, Alexander Naumov, deputy chairman of the National Council of the financial market was quoted in Izvestia to say that regulation of digital currency is necessary and people who use bitcoin in this way will be prosecuted. “Regulating Bitcoin market in the Russian Federation Central Bank will need cooperation with the Ministry of Communications and the Federal Security Service. Fraudsters may get imprisonment for up to 5 years under Illegal Banking Activity,” Naumov said.