On Thursday, the Russian Ministry of Finance proposed to introduce imprisonment for issuing and using “money substitutes”, such as Bitcoin and other cryptocurrencies. One of the currencies that seemingly falls under the suggested legislation is BitRuble, a project by the Russian payment processor Qiwi.
However, as Qiwi’s Head of Cryptotech Development, Aleksey Arkhipov, said, the BitRuble team isn’t planning to go to prison any time soon:
“We believe that our project doesn’t fall under the jurisdiction of this initiative. We call it differently even inside the team – cryptomoney or e-currency, just to avoid unnecessary confusion. That is because BitRuble is actually different from the usual understanding of what cryptocurrencies are and from what we think the Ministry of Finance wants to combat with its legislation”
BitRuble to be launched in 2016
According to Arkhipov, Qiwi plans to launch BitRuble before the end of this year, however several crucial questions regarding its release are still to be decided. For instance, it was announced earlier that BitRuble will be tied to the fiat Ruble, which effectively makes this “cryptomoney” only a form of the fiat money circulating on the internet. As Arkhipov said, the company is currently in the process of solving this discrepancy.
Another issue which is yet to be resolved is security. Since BitRuble plans to work within the Russian legal field, any threats coming from fraudsters and other unscrupulous parties on the market will have to be dealt with in accordance with Russian law, Arkhipov says.
Money laundering issue
“Security is very important in any business. But this problem can only be fully solved through the involvement of the government, which means that there needs to be a legal basis for it in the Russian Federation. Moreover, we don’t think that the issue of money laundering is solved in any way inside Bitcoin – it’s more a case of the regulation of the exchanges and other aspects of Bitcoin’s use”
It’s worth noting that the Russian government’s representatives have mentioned many times in the past that cryptocurrencies can be used for money laundering and funding terrorism. However, according to Arkhipov, this problem can also be solved through the government regulation of the market of cryptocurrencies.
“After cryptomoney is included in the legal field, the level of security will rise automatically. Our BitRuble team is working in full compliance with the Russian money laundering legislation and KYC regulations,” Arkhipov says.
Powered by Blockchain
Back in September of last year, Qiwi announced plans to release its own virtual currency powered by blockchain technology. A month later, the head of the Russian Central Bank, Elvira Nabiullina, responded positively to the initiative behind BitRuble’s development and cryptocurrency research. However, the Russian financial ombudsman, Pavel Medvedev, claimed that Nabiullina’s comments contradicted current Russian legislation, calling the research and development “technological hooliganism”.
Despite the latest news about the possible introduction of a ban on cryptocurrency use in Russia, Qiwi is still optimistic about the future of its BitRuble.