Russia to Clarify Bitcoin Policy in Forthcoming Task Force Report

Russian financial authorities will release a paper on digital currencies as they relate to money laundering and terrorist financing.

AccessTimeIconJun 19, 2014 at 11:00 p.m. UTC
Updated Sep 11, 2021 at 10:54 a.m. UTC

Russian financial authorities appear to be close to clarifying their stance on bitcoin with the announcement of a forthcoming paper to by published by the Financial Action Task Force (FATF), an intergovernmental body set up to combat money laundering and terrorist financing.

Rossiyskaya Gazeta, a Russian-language news source, is reporting that the paper will mark the conclusion of research conducted by anti-money laundering (AML) and terrorist financing officials at the FATF and other agencies within Russia and around the world, including the US and UK.

The FATF paper is being spearheaded by the International Training and Methodology Center of Financial Monitoring, a division within Russian financial regulatory body, the Federal Financial Monitoring Service of the Russian Federation (Rosfinmonitoring).

The media outlet said that project manager Eugene Volovik spoke about the initiative during a meeting of the Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG) in Moscow. There, he explained the current climate and the need for tighter controls within Russia on what he called unchecked digital currency movement.

Volovik also acknowledged the transformative role that digital currencies may very well play long term, saying:

"Just as e-mail today has replaced the usual post offices and telegraph came to replace SMS and popular services such as Skype or Whyber [...] radical changes [could] begin with virtual currency.”

Paper to focus on money laundering

Volovik stated that the paper will outline the challenges digital currencies pose to domestic AML and terrorist financing personnel, and he added that such an effort is important for the potential of digital currencies to be fully employed.

By targeting the illicit uses of bitcoin technology, government regulators can support the development of a more mature digital currency ecosystem.

However, Volovik reiterated that despite these promises, Russian regulators remain committed to preventing digital currencies from being used to support criminal acts, which he said remains an outsized problem.

Russia undecided on bitcoin

Bitcoin has had a thus-far complicated history in Russia, owing to rumors that national financial authorities had initially banned the digital currency.

However, a later release from the Bank of Russia suggested that the bank was more focused on keeping bitcoin technology from supporting terrorist and criminal financing rather than simply outlawing it entirely.

According to Volovik, Russia belongs to a large group of countries that remain divided on bitcoin. Still, he added that an outright ban has not technically been put in place, as discussions are still ongoing about the future of digital currencies in Russia.

Notably, Rossiyskaya Gazeta followed up with an official from Rosfinmonitoring, who said that according to the country’s constitution, bitcoin is not a legal form of money.

Edit (20th June, 10am): This article previously stated that FATF was a Russian organisation, in fact it is international. This has now been corrected.

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