Russian Central Bank Plans to Block Bitcoin Exchange Websites, President Putin Calls for Regulations

According to a recent Reuters report, Russia is seemingly following China’s footsteps and blocking access to websites belonging to bitcoin exchanges and trading platforms, according to the first deputy governor of the Central Bank of Russia (CBR), Sergei Shvetsov. No outlet so far has reported on a date for the implementation of the plan.

The move was announced when the central bank official was speaking at a financial markets conference. Shvetsov stated that bitcoin has a “dubious” nature and that investors need to be protected from it. He stated:

“We cannot stand apart. We cannot give direct and easy access to such dubious instruments for retail (investors)”

Shvetsov further stated that the blockade will help protect Russian citizens and businesses from the “unreasonably high risks” they would be facing if dealing with cryptocurrencies. These views are in contrast with those offered last month by the country’s finance minister, Anton Siluanov, who at a financial forum in Moscow stated that cryptocurrencies are a reality and should be accepted by the Russian government.

Siluanov notably stated that banning them was senseless, and as such there was a need to regulate them. He added that his ministry was working on a law that would include registration for those who wish to purchase cryptocurrencies.

President Putin for and against bitcoin

Similarly, the country’s president, Vladimir Putin, stated that cryptocurrencies are used to launder money, evade taxes, and finance terrorism and that he’s aware of the central bank’s position on them.

Later on, president Putin held a meeting attended by top regulators to discuss cryptocurrencies. Among the attendees were the country’s finance minister Anton Siluanov, the central bank governor Elvira Nabiullina, and her deputy Olga Skorobogatova.

In the meeting, Putin recognized that cryptocurrencies are now relevant not only to Russia but also to the rest of the world, and even said that in some countries they are now becoming legal tender and an investment asset. Notably, according to the Kremlin’s website, he stated:

“I would like to draw your attention to the need to use the advantages that are offered by new technological solutions in the banking sphere.”

Then, the president quickly emphasized the lack of security in cryptocurrencies as, if the market is in a bubble, there’s no legally responsible entity. Moreover, he stated that using cryptocurrencies can be risky and that these currencies can be used for illegal activities.

Finally, at the end of the meeting, Putin cited how many countries are already working on the legislative framework for cryptocurrencies, and asserted that there is a need for regulations in the country in order to protect the interest of its citizens and businesses. He emphasized:

“It is important not to create unnecessary barriers, of course, but rather to provide essential conditions for advancing and upgrading the national financial system.”

Russia’s previous bans on cryptocurrencies

This wouldn’t be the first time Russia bans cryptocurrency-related websites. Back in 2015, Russia’s telecom regulator Roskomnadzor blocked various bitcoin-related websites, anticipating a legislative ban on the cryptocurrency. A Russian court soon overturned the move.

In 2016, the telecom regulator temporarily blocked access to bitcoin exchanges BTC-e and Bitstamp, and later on, that year blocked access to peer-to-peer bitcoin exchange platform LocalBitcoins.

This time, however, Shvetsov added that bitcoin is an asset that can quickly generate high returns and that it shows signs of being a pyramid scheme. In Russia, there is a specific procedure to block pyramid scheme-related websites, but Schvetsov revealed that there are a lot of them:

“There is a permanent job of blocking malicious sites that involve Russian citizens in financial pyramid schemes. Everything that contradicts or violates Russian law, or creates unfair competition, will be limited.”