Russia Seeks Fines for Using Virtual Money Like Bitcoins

Russia is seeking to outlaw virtual currencies like bitcoins by introducing fines for transactions using unregulated digital money.

Private individuals could be fined up to 50,000 rubles ($1,250) and public officials up to 100,000 rubles, the Finance Ministry said in a statement today describing the draft law. It said businesses could face a penalty of as much as 1 million rubles.

The ministry didn’t say when it would submit the legislation to parliament. Deputy Finance Minister Alexey Moiseev was cited by Prime news agency last month as saying Russia is likely to adopt the ban by spring.

Russia’s prosecutor general has expressed concern that using bitcoins could draw people into illegal activity, including laundering money obtained from crime and financing terrorism.

The official currency is the ruble and the “use of any other monetary instruments or surrogates is forbidden,” the prosecutor’s office said in a statement in February.

Bitcoins have generated wide concern about their possible impact on national currencies, their potential for criminal misuse and the implications for taxation. Yet few countries have specific regulations applicable to the encrypted currency, the Law Library of Congress said in a report in January.

Herman Gref, chief executive of Russia’s largest lender OAO Sberbank, said in January he had sent letters to the Kremlin urging the authorities not to put restrictions on bitcoins. Sberbank in 2013 bought control in Yandex.Money, the electronic payments operator run by Russian Internet company Yandex NV.

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