Russia's Central Bank: Bitcoin should not be boycotted

Russia’s central bank has broken its silence on Bitcoin and digital currencies for the first time in months, with the regulator having issued a new statement suggesting the state further soften its tone on the topic.

According to the Wall Street Journal, the country's central bank is now collecting information on Bitcoin and digital currencies. Georgy Luntovsky, deputy chairman of the Russian Central Bank, said that although there is evidence that Bitcoin is used to pay for drugs and weapons in Russia, they will not take harsh measures against its use.

Luntovsky explained: “At this stage, we need to see how these currencies develop. These instruments should not be resisted.”

Earlier this year, the Russian Central Bank issued a warning that the use of Bitcoin and other “alternative currencies” in the Russian Federation was illegal, sparking global concerns that Russia was seeking to ban the use of Bitcoin.

Wait and see attitude

Luntovsky suggested that the central bank is taking a “wait and see” approach to regulating Bitcoin, a move that could influence other jurisdictions.

Several influential executives in Russia’s financial industry have been supporters of Bitcoin, including German Gref, who served as a government minister from 2000 to 2007.

Gref, who currently serves as chairman of the board of directors of Sberbank, Europe’s third-largest bank and part of Russia’s central bank, said an outright ban on bitcoin would be a “huge mistake” and that bitcoin should be studied and regulated.

Money laundering problem remains

In March, Russian authorities said they were open to discussions on digital currencies and that their initial warning was not intended to ban Bitcoin. Rather, it was an effort to combat criminal activity that exploits the anonymous payment system.

The use of bitcoin for money laundering and other financial crimes is the subject of a forthcoming report from the Financial Action Task Force, which combats money laundering and terrorist financing.