Russian government-owned RT and Reuters both report that Vladimir Putin has decided to take a stand against cryptocurrencies in general, and Bitcoin in particular. RT reports that Putin believes digital currencies could be used to finance terrorism, evade taxes and launder money, and that Bitcoin itself is a pyramid scheme.
Putin takes a stand
RT quotes Putin as saying that Bitcoin creates:
“Opportunities to launder funds acquired through criminal activites, tax evasion, even terrorism financing, as well as the spread of fraud schemes.”
After Putin blamed a host of Russia’s criminal problems on Bitcoin, the central bank echoed his remarks, calling digital currency a pyramid scheme:
“We have seen how Bitcoin has transformed a payment unit into an asset, which is bought in order to obtain a high yield in a short period of time. This is the definition of a pyramid.”
Of course, just a year or two ago, pundits were saying Bitcoin needed to be regulated because the falling price was causing investors to lose money. Now it’s the rising price that’s a problem, apparently.
There goes that plan
Ironically, just last month Finance Minister Anton Siluanov said:
“There is no sense banning [digital currencies], there is a need to regulate them.”
Less than a week ago, Siluanov was planning on including the topic of digital currency in the country’s financial literacy strategy.
Likewise, at the end of August, Cointelegraph reported that the Moscow Exchange was considering including Bitcoin-based derivatives and exchange traded funds (ETFs) among its many offerings.
Even though today is the first time Putin took a direct stand against Bitcoin, clouds have been gathering on the horizon for some time. Russia’s deputy finance minister Alexey Moiseev recently called Bitcoin a pyramid scheme and announced his intention only to allow “qualified investors” rather than “ordinary people” to buy Bitcoin.
Consequences
Cointelegraph reported earlier today that the Bank of Russia is attempting to block all Bitcoin exchanges in the country. Despite the sharply negative news out of Russia today, Bitcoin continues its surge toward $5,000. This comes following a sharp drop from $5,000 to $3,000 last month, and a rapid rebound that has brought the digital currency almost back to it’s all time high.
In the last month, the market first reacted to, then shrugged off, China’s ICO ban, China’s exchange ban, South Korea’s ICO ban, and now Russia’s attempt at banning Bitcoin. For the market to remain bullish in spite of the volume of bad news demonstrates just how powerful the Bitcoin bull is.