The Russian Ministry of Economic Development has not approved the bill banning cash equivalents, such as bitcoin and other forms of electronic money, as it can negatively influence retail businesses, telecom operators and banks in the country.
The bill was developed by the Ministry of Finance, following Vladimir Putin’s proposal to ban cash equivalents in accordance with the Russian law. According to the drafted bill, quasi-money is defined as objects of property rights, including in electronic forms, which are not provided by the bill. The Ministry also imposed fines on the creation, distribution and dissemination of “surrogate currencies”, which ranged from 5,000 to 1 million rubles.
The Ministry of Economic Development considers the new law will cause certain difficulties for banks, retailers and telecom operators as it is too imprecise. The various certificates, reward points, gift cards and other programs, aimed at attracting new clients, could be banned too.
For example, the bill will not allow the members of the “Thank you” program, developed by Sberbank, receiving bonus points when making purchases with a bank’s card.
A lot of companies came out against the law, including such Russian mobile operators as Megafon and MTS.
The National Payments Council considers the new drafted bill “could throw [Russia’s] payment service market a few years into the past, leading to a fall in the number of non-cash payments for goods and services” reports the RBK news agency.
Peter Darakhvelidze, development director at WebMoney, told RBK, the threats for the Russian economy are serious, taking into account the current economic situation in the country and the possible restriction of access to the world financial system and particularly the SWIFT payment system (Society for Worldwide Interbank Financial Telecommunication). Darakhvelidze believes the move is not right and the government should focus more on financial innovations, instead of banning them.
“The proposed draft regulation act doesn’t solve any tasks assigned, but only serves to create legal barriers to the implementation of marketing programs of businesses and business development in general,” stated the Ministry of Economic Development.
The Russian Ministry of Economic Development obliged the new bill’s developers to reconsider the bill, which imposes huge restrictions and obligations.
Under the Russian law, the Ministry of Finance can submit the reworked bill to the Ministry of Economic Development or leave it without changes and submit to the government.
In general, the outcome of the revision is unknown, as the reworked bill will still restrict the use of digital currency in Russia.