Alternative Finances

Bitcoins Are Back in Business in Russia

Bitcoins will be be allowed in Russia after all. At least for now.

In January, Russian telecommunications regulator Roskomnadzor banned access to seven bitcoin websites such as Bitcoin.org or Coinspot.ru based on a court ruling. According to Roskomnadzor, bitcoins were contributing to the growth of a shadow economy that finances terrorism. It was even feared at the time (and still is today) that bitcoins were to be completely banned, plunging the cryptocurrency’s value 32 percent in two days.

But owners of the seven websites fought back — and last week, the Russian Courts viewed the banning of these websites as illegal. “The decision of the court Nevyansk about the blocks was canceled because it clearly violates the laws of Russia,” said Ivan Tikhonov, owner of BTCsec.com, to Bitcoin Magazine.

Bitcoin-related companies which had to exclude the Russian market or even migrate to another country due to the ban can now re-enter the Russian market. “This is good. Now there is a chance that people will be able to obtain objective information. We will be able to legally work these technologies,” said Tikhonov.

In April, a conference on bitcoin in Moscow – the first one of its kind in Russia – focused mostly on the collapse of the stock exchanges and companies, drop in bitcoin prices, and on the ban and blocking of the seven websites. According to its press release, the event was attended by 130 participants including representatives of the Russian Central Bank, the Ministry of Finance and the Federal Service for Supervision of Communications, Information Technology. As London recently voiced its desire to be the epicenter for bitcoin as a FinTech Hub, the Russian government is at least taking digital currency seriously.

Russian authorities are in fact very hostile to the bitcoin phenomena in general in the context of a weak Ruble. In August 2014, proposals to ban bitcoins were to be effective of spring 2015. The recent court decision however, implies that businesses will be allowed to use bitcoins. Last month, The New York Times published an extensive report on the future and opportunities of the cryptocurrency in Argentina, which also has a volatile currency. “Bitcoin can be cheaper and more convenient than Argentina’s financial establishment. In effect, Argentines are conducting an ambitious experiment, one that threatens ultimately to spread to the United States and disrupt some of the most basic services its banks have to offer.” Could the same be true for Russia?

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