Traders and analysts are divided about the status of cryptocurrencies; some consider them alternative money while others deny them as a medium of exchange. Cryptocurrencies initially emerged as an alternative to traditional currencies, but market opinion has changed significantly after seeing the huge price volatility in Bitcoin (BTC) in particular.
Big banks such as JP Morgan (NYSE:JPM), Banks of America (NYSE:BAC), Citigroup (NYSE:C) and others have already banned customers[1] from buying cryptocurrencies using credit cards.
Regulators from India, China, and Bangladesh entirely banned cryptocurrencies, while the U.K. has formed a taskforce[2] to scope out the pros and cons of cryptomarkets.
Russia Officially Call Cryptocurrency as an Asset
Russia, however, considers the revolution of digital currencies an important one. Reports[3] suggest that the Russian Parliament is close to drafting a bill on cryptocurrencies. They consider digital currencies as assets in the eyes of the law, and won’t allow foreigners and locals to use coins for payment of goods and services within Russia. Elvira Nabiullina, President of the Central Bank of Russia, called Bitcoin “quasi-money” – meaning assets that are highly liquifiable and investors and traders can easily convert them into cash.
Investors will only be allowed to convert digital tokens into fiat currency through existing trading platforms that have stock exchange licenses.
Russia is regulating cryptocurrencies in a bid to reduce the involvement of illegal activities, tax evasion, and money laundering. It will only allow the crypto transaction to process through licensed operators that are under the control of the government.
Market Forces Support Regulations
Bitcoin, Ripple (XRP), Ethereum (ETH) and other altcoins are under pressure in the last 24 hours, due to increasing regulator crackdowns on crypto markets. However, the pundits see regulators interference as a favorable long-term factor for crypto markets.
“The purpose of these bills is to define the scope of action and the regulations of cryptocurrencies, not their prohibition, and this is good news for Russia,” Anti Danilevski, Chief Executive Officer of blockchain crowdfunding website KickICO, told Forbes.
