A bill prepared by Russia’s Ministry of Finance targeting the creation and circulation of so-called money surrogates, a classification that would include digital currencies like bitcoin, has been at least temporarily withdrawn from consideration following comments from the country’s Justice Ministry.

As reported by regional news source RNS last week, the bill – popularly known as the “Russian bitcoin ban” – received some negative feedback after the Justice Ministry is said to have objected to the bill on the grounds that its comments were not incorporated. The national legislature, the Duma, has been deliberating the bill since earlier this year.

Up for debate is the extent to which those who issue or circulate private monies in Russia will be punished. Reports out of Russia have indicated that some advocates are pushing for multi-year jail sentences and fines, though the latest news points to disagreements among some in government about how to approach regulation for the technology.

Observers have suggested that defects within the bill may have doomed it from the start.

In statements, Nikita Soshnikov, partner at Moscow-based Tolkachev and Partners Law Firm, called the bill “poorly drafted”.

Soshnikov told CoinDesk:

“The [Finance] Ministry has not provided [the] appropriate justification for criminalization of cryptocurrencies and its public danger (as an essential criterion for criminalization). The draft is broadly worded, therefore, wide range of activities regarding e-currencies can potentially fall within proposed ‘money surrogates’ definition.”

Additionally, according to Soshnikov, the bill itself was said to have contained redundancies that sparked criticism from the Justice Ministry.

“[The] Russian Ministry of Justice stated that Russian Criminal Code already provides for similar regulations that criminalize illegal turnover of means of payment,” he said.

Bill’s future unclear

Soshnikov went on to say that it was “unsurprising” that the bill had attracted criticism from the Justice Ministry, a move that he said was likely to postpone further debate or passage of the bill for the foreseeable future.

“It is unclear when the proposed draft will be submitted to the State Duma and hopefully [it] will be subject to further public discussions,” he said.

One other possible wrinkle in the debate, as suggested by comments provided to CoinDesk, is whether digital currencies should be treated separately from non-financial applications of the blockchain. The Russian Finance Ministry has indicated its desire to take this approach in the past, even while other officials, including those from the country’s central bank, have previously indicated it may not support this approach.

Alexey Troshichev, blockchain architect for domestic payment processing services Qiwi, suggested that restrictions on certain aspects of the technology would impair genuine innovation.

“How [will] startups, how [will] other companies will experiment if they won’t be allowed to buy bitcoins?” Troshichev told CoinDesk.

He cautioned that those in the global community should realize that the discussions in region remain broad, and that understanding that the technologies are linked is coming gradually.

He concluded:

“This is [at the] very early stage. It arrives at the question that we should unite and discuss them as a whole, not just separately.”

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