Russia has been making a great deal of media headlines as the country continues to regulate the use of digital currencies.
In fact, Russia’s Ministry of Finance has drafted a new proposal seeking to penalize users of Bitcoin to a jail term of up to seven years.
However, it is to be kept in mind that this punishment is applicable only in the case of business owners who use Bitcoin.
On the other hand, regular users are likely to be served a jail term of maximum four years.
Reports also indicate that Russia’s central bank is planning to go ahead with the research into blockchain technology.
For this purpose, the bank has already created a dedicated taskforce.
The team will study as to how the blockchain technology used by Bitcoin can be of any benefit to the Russian central bank.
However, the bank has no plans to start to issue digital currency as the law still prohibits the use of cryptocurrencies.
Penalty for Bitcoin Usage
The proposal for punishing Bitcoin users is only in the draft stage at the moment, but Russia’s Ministry of Finance is serious about cracking down on the users in the country.
In Russia, the Central Bank of Russia is the only entity that is lawfully authorized for bringing out money into circulation.
As Bitcoin is not issued or controlled by the central bank, its use is considered to be against the law.
Russia may make the use of digital currency within the country illegal, but penalizing users by putting them in jail termis taking things a little too far, according to observers.
If the proposal becomes law, regular users can be sent to jail for up to four years.
On the other hand, business owners who deal in Bitcoin could be sent to jail for nearly twice the time.
Both the scenarios are definitely not acceptable at any cost.
All said and done, punishing the usage and distribution of Bitcoin is not something that is new to Russia.
According to the digital currency regulation that is currently in force in the country, production, sale and distribution of Bitcoin warrants one year of correctional labor sentence.
Organized groups that deal with Bitcoin are an exception to this rule.
The members of such groups could be sentenced to correctional labor for a period of two years.
While a jail sentence is by itself an unacceptable kind of punishment, the Ministry of Financeis thinking ofenforcing some other penalties.
Individuals convicted for Bitcoin usage may even be asked to pay up to 500,000 Ruble as fine.
Those that are not in a position to pay the fine will have to forgo their income/salary for the successive three years.
Or else, they could choose to spend four years in jail. Groups or companies that are convicted of Bitcoin usage will be having twice the penalty.
The Ministry of Finance is extremely concerned about the usage of cryptocurrency as it would enable the citizens of the country to involve in illegal activities which are difficult to trace.
The government’s greatest concern is the involvement of people of the country in terrorist funding and money laundering.
However, the Ministry of Finance fails to understand the fact that blockchain technology is not something that is difficult to trace and there is no anonymity as far as Bitcoin is concerned.
Qiwi to Continue with Development of Digital Currency
Russia has not been enamored by the concept of digital currency and its stance is not likely to change in the near future.
As a result, the startup Qiwi, which has been working on a digital currency project, has been facing serious resistance from financial experts and government officials alike.
Despite the fact that there is a proposal to make usage of cryptocurrency punishable under the law and the prospect of spending time in jail, the startup is planning to pursue the development of the digital currency called BitRuble and blockchain technology in the country.
Qiwi’s concept is actually remarkable and it is different from Bitcoin.
BitRuble, which has been gaining some amount of media attention for a few months now, would be the first cryptocurrency designed specifically for the Russian market.