Serenity CTO Vasily Alexeev on cryptocurrency ban in Russia
Central Bank of Russia and state financial watchdog Rosfinmonitoring are preparing an initiative to ban cryptocurrencies as a means of payment in Russia. In a conversation with Deventer.org, Serenity CTO Vasily Alexeev talked about the possible ramifications of the new legislation for fintech companies and cryptocurrency holders.
If the matter goes beyond words and actually reaches State Duma, this bill may join the list of other legislative initiatives of recent years that are strict, yet technically unfeasible.
Currently, all cryptocurrency transactions are already conducted in the informal economy: they cannot possibly be taxed since Russian law doesn’t recognize cryptocurrency as an asset. Moreover, it’s fundamentally impossible to learn who, when, and what for made a payment in Bitcoin, not to mention who owns what wallet.
It’s important to understand that to create a cryptocurrency wallet, it’s enough to generate 12 random words using special software. Access details to such a wallet exist only in your head, and no one can prove that you have them, while you still can receive funds and, if necessary, send them using these 12 words.
Right now, Russian companies operating within the legal framework that accept cryptocurrency do it through foreign intermediaries who receive cryptocurrency on their wallets and sent fiat money to the companies. In all likelihood, this arrangement will remain legal.
And even if the bill is worded in such a way as to ban this, it would hardly be a devastating blow for these companies, since in this case, they lose only a small fraction of their payments. Companies that cannot operate legally are a different matter: for instance, online casinos, or pirated content websites. Cryptocurrency payments may make up a substantial part of their income. However, they already have nothing to lose: breaking one more law won’t change anything.