It appears the Bank of Russia has followed the same line of thinking on bitcoin (BTC) as other Asian and European governments and central banks. It issued a statement on the popular digital currency Monday in which it listed its concerns and urged users to move ahead with caution to avoid being prosecuted for crimes, whether intentionally or unintentionally.
The central bank stated that these virtual currencies are not backed by a state entity, bitcoins are extremely speculative and thus volatile and cryptocurrency exchanges are “high risk.” It warned citizens and businesses about the risks that come with these kinds of alternative currencies, including legality matters.
One important caveat to note is that it says issuing alternative currencies is prohibited. The Bank of Russia argued that users might be breaking the law unintentionally because they may aid those who are part of transaction and exchanges services intending to break the law, such as money laundering, financing terrorism or drug dealing.
“According to Article 27 of the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’ issuing monetary surrogates is prohibited in the Russian Federation,” the statement said.
The bank’s statement comes as German Gref, head of Sberbank, which is owned by the Bank of Russia, came out in favor of bitcoin. Speaking at the World Economic Forum, Gref explained that it’s an interesting global experiment and it could very well benefit the global economy in the next few years. He argued that any type of ban on bitcoin would be a terrible mistake.
It was reported, though, that Gref plans on competing with bitcoin by establishing his very own electronic money in collaboration with the online payment system Yandex.Money, which is part of the Yandex search engine.
In the past week, it would seem that bitcoin has been under attack by the establishment. Robert Shiller, a Keynesian economist and Nobel laureate, called the cryptocurrency a bubble, BitInstant CEO has been arrested and more central banks have come out against the virtual currency.
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