Putin says there are ‘serious, funademental issues’ surrounding the use of bitcoin and digital currency


REUTERS/Osman Orsal

Russia’s President Vladimir Putin gestures during a news conference after a meeting with Turkey’s Prime Minister Tayyip Erdogan in Istanbul December 3, 2012.

Russian President Vladimir Putin has issued his first remarks on bitcoin and digital currencies in an educational forum broadcast on domestic TV network Russia 24.

Local news sources including Gazeta, state-operated news agency RIA and TASS are reporting Putin indicated his belief that the Bank of Russia, the country’s central bank, has so far taken a reasonable stance on the technology by exploring, not rejecting, its applications.

Further, he suggested that while he considered the use of digital currency as money to be perhaps problematic, the technology could be considered as a novel way to manage or calculate transactions.

“[Bitcoins] are backed by nothing. This money [is backed by nothing], that’s the point, this is the major problem. They are not really linked to anything and backed by nothing,” Putin said. “However as an accounting unit, these ‘coins’ or whatever are they called, they can be used, and their adoption becomes wider and wider. As some kind of unit in some account, probably, it’s possible.”

Putin continued:

“We do not reject anything, but there are serious, really fundamental issues related to its wider usage, at least, today.”

A spokesperson for the president later specified in a separate announcement that he was speaking broadly about digital currency technology, not specifically bitcoin.

“It’s the biggest sign of bitcoin legality now in Russia,” ICBIT Trading CEO Aleksey Bragin told CoinDesk. “It was not forbidden before, but it was impossible to operate any bitcoin business in Russia (no bank accounts, to start with), and mining was always a gray area.”

Other members of the local community saw it as a similarly positive step for a country that has long had one of the most reactionary stances to the technology.

“While Mr Putin didn’t say anything concrete about bitcoin legislation in Russia, it’s definitely a good sign that our government doesn’t want to prohibit something before getting a better insight in the field,” Indacoin CEO Stanislav Kosorukov said.

A Bitcoin sign is seen in a window in Toronto, May 8, 2014.
A Bitcoin sign is seen in a window in Toronto, May 8, 2014.

REUTERS/Mark Blinch

Ivan Tikhonov of Russian-language bitcoin news source BTCsec added his belief that the statements did much to advance the conversation regarding whether there is government support for the technology.

“One thing is certain, no one talked about the fact that bitcoin is prohibited or required to be prohibited,” he added.

The announcement follows reports that the country’s lawmakers had updated a draft bill aimed at outlawing the use of digital currencies as monetary surrogates.

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