While on one side, Russia is regulating digital currencies, on the other hand, Roskomnadzor, a federal executive body responsible for overseeing the media, is banning the crypto, fiat, and e-currencies exchange monitoring website Bestchange.
While the site is blocked by RKN, Bestchange advises people to use the blocking bypass tools like VPN, mirror site, and extensions to access the site. Other crypto sites affected include ProstocCoin and CryptoRussia.
The step has been taken by RKN because these sites promote the use of other currencies besides the ruble in the country. This is because the money can only be issued by the Central Bank of the Russian Federation, and the introduction of other funds in the Russian Federation is not allowed, states the court document.
The court found these websites guilty of allowing the use of Bitcoin to purchase goods and services which violate Federal Laws. Besides the preventing financing of terrorist activities with Bitcoin, it also states the decentralized nature of bitcoin’s issuance eliminates the “possibility of its regulation.”
Amidst this anti-cryptocurrency move, economist Vladislav Ginko wrote that the country is missing the “unique” chance of stacking bitcoin as Russia focuses on gold hoarding with “the looming severe sanctions from the United States may provoke a cascade selling out of Russia’s debt.”
Ginkgo is a former vice-rector of Moscow-based Jewish University, currently an analyst and lecturer at Russia’s leading state think-tank, Presidential Academy.
He points out how some of Russia’s elite believe new sanctions are almost inevitable while the share of foreign investors plummeted from 34.9% in March this year to 29.8%. Russia’s central bank has also slashed the key rate to 4.25%.
In response, Russia’s state has become the biggest buyer of domestic produced gold. In August, Russia’s banking system accumulated 97.7 tons of gold, up 21% from one month earlier.
However, according to Ginko, the banks should invest in bitcoin instead, as some Russian elites also believe. Some of them reportedly bought BTC in January 2019 when BTC was around $3,500. He said,
“The current price of Bitcoin is not $500,000 yet, but $11,700, which means a 330% return for less than two years. Russia may miss an opportunity to catch a lucky ‘Bitcoin ticket’ to the future, and instead of it falls into the gold trap.”