Russian Minister Confirms Plans to Ban Bitcoin-to-Fiat Conversions

Russia's Deputy Finance Minister has confirmed the country's plans to penalise the conversion of cryptocurrencies such as bitcoin into the ruble.

Speaking to CoinDesk, Alexey Moiseev said a proposed draft law has been created and, if passed, would mean people engaging in crypto-to-fiat conversions would face up to four years in prison.

He explained:

"It's true that we have developed draft law which provides up to four years in prison for some types of activities which relate to ... quasi-currencies. These types of activities are typically related to an exchange of those currencies into the Russian national currency – the ruble. This is the only type of activity which we propose to penalise with criminal sentences."

Moiseev went on to say that, under the proposed law, people would not be penalised for mining cryptocurrencies or converting one cryptocurrency to another.

Bitcoin in Russia

The proposed law follows a Russian government official's public condemnation of payment company QIWI's plans to release its own digital currency – known as the bitruble.

Moiseev's comments also come after Vladimir Putin, the country's President, issued his first remarks on digital currencies in July.

Speaking during a TV broadcast, Putin said that, although the technology faced various challenges in terms of adoption, it could not be dismissed.

Prior to Putin's public address, reports about a possible bitcoin regulation meeting between Russia's central bank and representatives from the country's financial markets emerged in June.

Earlier this year, Liberal Democratic Party MP Andrei Svintsov contributed to bitcoin's rocky history in Russia, telling a national broadcaster that digital currencies such as bitcoin were a conspiracy created by US intelligence agencies.

Russia Finance Ministry image via Ekaterina Bykova / Shutterstock.com