(Newswire.net — August 30, 2017) — Russia was praised by the digital currency community earlier this year when Russian media announced that the country intended on legalizing Bitcoin by 2018. However, Deputy Finance Minister Alexei Moiseev suggested this week that Russian regulatory authorities may intend to seek restrictions on its use.
In an interview with Russia 24, Moiseev stated that Russian financial authorities should classify Bitcoin and other cryptocurrencies as assets that should only be accessible to sophisticated investors.
Moiseev believes that the volatility and nature of cryptocurrency presents a huge risk to average citizens looking to by the decentralized currencies. Moiseev said that he wishes to protect Russian citizens from the pitfalls of investing all, or a significant part of, their net worth into cryptocurrencies to make a quick gain on their money. He went on to say that cryptocurrency should be regulated as a financial asset because they can be used as a Ponzi-pyramid style investment to dupe innocent investors into making an economic error.
However, regulating the currency in the same manner that regulated forex platforms operate would then reduce the freedom that the virtual currency offers investors as a completely independent and decentralized currency, thus eliminating one of its primary benefits that make cryptocurrencies like Bitcoin so attractive in the first place.
The Deputy Finance Ministers statement created a stirring of unrest and complete surprise in the cryptocurrency community. Previously Russia has been seen as a friend of crypto, with the announcement of legalization and the announcement by Putin’s aide that Russia would seek to build a Bitcoin mining network that would be the largest of its kind in the world.
The investment into the cryptocurrency infrastructure technology was expected to be in the area of $100 million, with the eventual goal of achieving 30% of the global mining hash power. China currently is the world’s largest miner of Bitcoin and a 30% target by the Russians would usurp the Chinese as the global mining authority for the king of the cryptocurrencies.
During his interview, Moiseev went onto say that he was concerned over the use of cryptocurrencies by global criminal organizations and terrorist groups as a financial vehicle to acquire funding for terrorist and criminal activities. Money laundering also featured on the Deputy Finance Ministers agenda, calling for more stringent regulation on the monitoring of cryptocurrency transactions.
Moiseev says that he would like to see Bitcoin being bought and sold on stock exchanges in the same as equities and bonds. The cryptocurrency would only be available to institutional and professional investors that understand how to trade the assets properly. With this model, he believes that the investing public is protected from the risk involved with illegal activities and the loss of funds in volatile price movements.
This statement echoes the statement made by the SEC last month which stipulated that cryptocurrencies, including Bitcoin, and all of the new cryptocurrencies created via ICO’s, should be viewed as securities and therefore follow the necessary regulatory steps when registering.
This tightening of the digital currency world is gaining traction as more countries start to become aware of the impact of cryptocurrencies and the potential they have to usurp the current financial system at some point in the future. No-one can be sure what the future holds for Bitcoin and crypto as a whole. However, we can be sure to see more regulation slowly being applied by governments around the world.