Bitcoin and various altcoins have endured turbulent times in Russia as the government continually changes its stance on cryptocurrencies.
Last month, Russia announced that it would be issuing its very own cryptocurrency which would be regulated by its very own authorities. ‘Cryptoruble’ cannot be mined, but people would be able to trade the virtual currency with Russian Rubles.
A little over three weeks later, Russia’s communications minister Nikolay Nikiforov reiterated that Bitcoin trade would never be legalized in the country.
Despite all of this, there still seems to be a healthy appetite for Bitcoin and cryptocurrency in the country, with bank and financial institution heads making interesting statements on the subject.
German Gref, who is the head of Russian state bank Sberbank, believes that the acceptance of Bitcoin and cryptocurrencies by the masses cannot be ignored:
“Virtual currencies are a natural outcome of Blockchain technology. We may ban them; we may welcome them. It is trendy to urge people not to play with them. But they are a fact of our life.”
While the man on the street openly buys and sells Bitcoin, Ethereum and other altcoins, most financial institutions and governments remain wary of virtual currencies.
However, Gref believes that apathy is slowly changing.
“Protectionism is just the first reaction of the state. However, both the institution of private money and the states, which will dare to change the way currency is issued, will eventually find a place for cryptocurrencies in the economy.”
Cryptoruble proves a point
The fact that the Russian government intends to issue its very own virtual currency proves that global institutions are more than aware of the applications of Blockchain technology.
The Russian government will also tax profits made on the sale of Cryptorubles. Herein lies the rub.
Cryptocurrencies cut out governments and banks and that is one of the biggest reasons why authorities are so opposed to virtual currencies.
It’s incredibly difficult to tax and make profit off cryptocurrencies, and that is the biggest hurdle standing in the way of legalizing virtual currencies in various countries.