Srp 02

Russian Economic Minister Cautions Against Bitcoin ‘Pyramid Scheme’ As Russian Banks Adopt Blockchain Technology

· August 2, 2017 · 5:30 pm

Russian Economic Development minister, Maxim Oreshkin brands Bitcoin “a pyramid scheme” as the country’s largest banks including Sberbank PJSC and VTB Group look to a modified Ethereum blockchain to provide safer and faster payments.


What appears to be mixed messages coming out of Russia, where both a Bitcoin pyramid scheme warning and a veritable big bank endorsement of Ethereum based blockchain technology have been issued in the same week, proves indicative of the approach taken by governments around the world. Governments not wanting to stifle their countries’ role in what essentially amounts to be a technological revolution are taking a cautious and tentative approach to cryptocurrency in general.

In an interview with Russia’s Rossiya 24, Russian Economic Development Minister Maxim Oreshkin said (translated):

So far the markets of cryptocurrencies resemble a financial pyramid, and it is necessary to treat the value of this asset very carefully.

Technology Benefits

Bitcoin and blockchain technology benefits

Bitcoin as a pyramid scheme investment is a warning issued by governments and investors around the world, carefully considering a balance between promoting the benefits of blockchain technology and protecting inexperienced investors from it. Governments are keen to emphasize that cryptocurrencies such as Bitcoin are not a currency, which does avoid issues of regulation, with the President of the Russian Federation Vladimir Putin having previously announced;

Our attitude to this today is very cautious because almost nothing is regulated in this area today.

Benefits of Blockchain Technology For Banks

Benefits of blockchain technology for banks

Pyramid scheme investment warnings do not necessarily contradict news of active investment in blockchain-based technologies. Russia’s big banks have formed a consortium, similar to that of other banks outside of Russia, including Sberbank PJSC and VTB Group to provide safer and faster methods of payment. The consortium

The consortium is focusing on a modified version of the Ethereum blockchain, utilizing its ability to provide smart contracts. For instance, a blockchain method could cut costs by as much as 80% in the highly notarized financial sector, cutting out intermediaries in key areas such as mortgage certificates. Intermediaries such as notary bodies also increase security risks and data exposure in areas such as data storage and document transference.

Russian banks are keen to remain apace with technological advancement in the blockchain arena, seeking the cost saving, efficient and secure form of banking. Another factor to consider is the current state of banking in Russia. According to Vyacheslav Putilovsky, an analyst at the Moscow-based rating company Expert RA:

Russia’s not a very developed banking market. The top banks here are betting that they can catch up and maybe even overtake their western competitors in their adaptation of this type of technology.

It provides an opportunity for Russia to both reform their banking practices and keep up with the latest technological advancements. Exactly how they can mimic the same security provided by a large, decentralized and financially incentivized blockchain like that of Bitcoin remains to be seen.

Bitcoin’s financial incentive, rewarding miners, is a fundamental component of establishing a decentralized and secure blockchain ledger potentially leaving governments to see cryptocurrency investment as a potential state asset as opposed to empowering a rival to a state regulated currency. With other banks looking to companies like IBM to provide their infrastructure, it seems further cost cuts could be made by embracing what is already readily available and secure by utilizing Bitcoin’s already well establish and secure blockchain.

Do you think Russia’s warning about Bitcoin and its major banks forming a consortium to explore blockchain technology contradict one another? Let us know in the comments below.


Images courtesy of Shutterstock, Pixabay

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Čvn 02

Russia Will Develop ‘Only Freely Tradeable’ National Cryptocurrency

· June 2, 2017 · 2:30 pm

Russia has confirmed it is developing its own bank-backed cryptocurrency amid mixed reports about its future status.


Central Bank VP: Cryptocurrency ‘Is The Future’

Various sources report that Central Bank senior vice-president Olga Skorobogatova, who was speaking at the St. Petersburg International Economic Forum 2017, confirmed lawmakers’ next move as part of Russia’s increasingly hands-on approach to cryptocurrency.

“Regulators of all countries agree that it’s time to develop national cryptocurrencies, this is the future,” local news agency TASS translated a forum speech.

Every country will decide on specific time frames. After our pilot projects we will understand what system we could use in our case for our national currency.

Sberbank’s ‘Russian Bitcoin’ To Get Special Treatment?

While TASS adds that Sberbank chief Herman Gref was “in favor” of developing a national cryptocurrency, elsewhere it appears his involvement was much more explicit.

An unofficial news feed on social media platform Telegram cites unmentioned sources stating Sberbank will form the “basis” of what it calls “Russian Bitcoin.” In addition, this will be “the only cryptocurrency freely buyable and sellable in Russia” upon its release.

“All the others will only be available through exchangers or exchanges,” it added in a post Friday.

No Ban, Only Bank-Style ‘Monitoring’

It is understood that Russian authorities will no longer seek to ban or compromise the use of Bitcoin or altcoins in future regulatory packages.

Reversing its former hostile stance towards so-called “surrogate currencies,” the focus regarding regulation now appears to be on limiting risks to consumers while allowing somewhat intense “monitoring” of transactions in non-ruble currencies within Russia’s borders.

Previous updates from the government have included a specific wish to have Bitcoin transactions observed to the same degree as banking transactions, despite the fact that instigating such a policy would likely prove exceedingly difficult.

“We’ll be able to be more exact about this issue in two to three years’ time, once we have best practices in place and will be in a position to share with you what form [cryptocurrency implementation in Russia] will take,” a further news portal RBC cites Skorobogatova as saying.

Explicit documentation regarding taxation of cryptocurrencies is meanwhile expected this month.

A number of Russian banks in addition to Sberbank have made positive statements about both Bitcoin and Blockchain technology in recent months, one even likening Bitcoin to “positive bacteria” similar to those found in probiotic yogurt.

What do you think about Russia’s plans to develop its own cryptocurrency? Let us know in the comments below!


Images courtesy of Shutterstock, Sberbank

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Led 22

Bitcoin is Being Increasingly Regulated Across the Globe

· January 22, 2017 · 4:00 am

Countries are reiterating tax specifications as Bitcoin becomes increasingly regulated around the globe amid rising price and popularity. 


Bitcoin Taken Seriously, Increasingly Regulated

Starting the year in the $1,000 USD range, Bitcoin has had an eventful month and January isn’t even over yet! So far, we’ve seen many countries take a new stance on Bitcoin in regard to regulations and taxes.

Although this may cause some commotion in the short-term, as seen with the Public Bank of China inspections, which led to a crash in the price, it’s actually great news for Bitcoin. It means countries are taking Bitcoin seriously (as they should), allowing it to intermingle with their traditional economies, rather than considering national bans.

Although we doubt that Bitcoin will be chosen as the official currency by any country in the near future, 2017 may hold great things for Bitcoin. Below are just some of the countries, who have recently reiterated their stance or are starting to consider regulating virtual currencies.

Poland

In Poland, Bitcoin miners were subject to a 23% VAT when selling the cryptocurrency. This is because mining was considered a service and the act of selling Bitcoin was subject to a fee for this service.

Even recently, in November 2016, a case in the city of Poznan led the Finance Minister to rule that the sale of bitcoins is an act subject to VAT as a supply of services.

poland

However, a recent case in January where a company issued foreign customers invoices in U.S dollars to be paid in Bitcoin led the country to revisit the subject. The Minister of Finance decided that the action selling bitcoins, for which the taxpayer occasionally received as compensation for services rendered, does not constitute an economic activity. Thus, Bitcoin is not subject to VAT.

The Minister pointed out that the sale of virtual currency would be taxed only if the company conducted professional activity in this field (eg. currency, banking services) and charged a commission fee for doing so.

The decision was based on the ruling of the European Court of Justice in October 2015, which stated that bitcoin transactions are exempt from the consumption tax since Bitcoin is used as a means of payment and not as a commodity.

Israel

The Israeli Tax Authority, however, has taken a different stance on the subject and has classified Bitcoin as taxable asset, and not as a currency or payment system.

A new document issued by the Israel Tax Authority on January 12th states that Bitcoin, Litecoin and other virtual currencies are considered neither as currencies or financial securities and are instead taxable assets that are subject to capital gains tax and value added tax (VAT).

israel

Individuals will be required to pay the capital gains tax of 25% every time they sell a cryptocurrency. Companies and individuals that are trading, marketing or mining bitcoin will be taxed as a business and must charge their clients a 17% VAT. Companies that accept Bitcoin payments, will need to classify the exchange as barter, which will lead to extra paperwork for the company.

The document was issued in response to the repeated questions from cryptocurrency users in the country. Although the new tax laws will make the life of cryptocurrency users harder, the regulatory landscape has at least emerged from the uncertain gray area.

China

Although no new regulations have yet been issued by the country, the latest developments suggest they will soon be.

Following the inspections carried out by the People’s Bank of China to domestic exchanges, these have halted margin trading services, which has led some to believe that new regulations are on the horizon.

Trading fees may also be applied to exchanges in China, as seen in the warning posted on BTCC’s official website.

China Bitcoin Core attack

Currently, citizens in China are free to hold and trade bitcoins, although financial firms cannot. The regulatory framework issued by China in 2013 sees Bitcoin, not as a currency, but as a virtual commodity. 

The sale and importation of commodities are subject to a 17% VAT in the country.

Russia

Russia, which has always had a difficult relation with the cryptocurrency has surprised many on this subject by stating that no further action will be taken by the government to prohibit the use of Bitcoin.

Russians_paywithBTC_articlecover_Bitcoinist

Instead, the Bank of Russia will try to attain a better knowledge of Bitcoin and build a regulatory framework around it. Bank of Russia’s Deputy Chairman Olga Skorobogatova stated:

It became clear that it is not straightforward to address Bitcoin with existing financial regulation. Regulators and financial agencies agree to not prohibit the use of Bitcoin. Instead, we want to gain a better understanding of Bitcoin, and build a regulatory framework we have gathered the necessary knowledge.

Nigeria

In Nigeria, where crypto-themed Ponzi schemes like OneCoin and Swisscoin are highly popular, warnings have been issued by two separate authorities, the Securities and exchange commission (SEC) and the Central Bank of Nigeria (CBN).

Bitcoinist_Central Bank of Nigeria

Although no new regulations have been issued, both notices warn users and financial institutions regarding the legal status of cryptocurrencies, which are not seen as legal tender, stating that financial institutions should deal with cryptocurrencies at their own risk.

Both notices mention OneCoin as a cryptocurrency, which demonstrates the lack of knowledge some countries still face when dealing with Bitcoin and other digital currencies.

For more about how Bitcoin is regulated (or unregulated) in other countries, go here.

What’s your take on the recent regulatory developments in the world of Bitcoin? Are they a step in the right direction? Let us know below!


Images courtesy of shutterstock

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Led 06

Pump It Up: Russian Gym Starts Accepting Bitcoin for Membership

· January 6, 2017 · 4:00 am

Russian-based sports gym chain NanoFitness has announced it will begin accepting Bitcoin as payment for membership and related services.


‘We Were Interested in FinTech-Innovations’

While a merchant announcing the acceptance of bitcoin has become a daily occurrence and not nearly as revolutionary as it was several years ago, it’s not every day that the business is based in Russia.

itgc-wu3nqi

The St. Petersburg registered company posted the announcement on its social media page [loosely translated]:

The #NanoFitness fitness-studio, which launched its franchise chain several months ago and known by the #FutureFitness slogan, has started selling its membership for #bitcoin.

Interestingly, the announcement came on January 3, Bitcoin’s eighth birthday, which was probably not a coincidence and by someone who has at least some knowledge of the world’s first cryptocurrency.   

karpenko

Classic bodybuilding gold medalist and NanoFitness CEO, Dmitry Karpenko made the decision to accept bitcoin after careful examination and “consultation with fintech experts and an assessment of target audience preferences,” the announcement explains.

But ultimately, the decision was made in order to solidify its image as a forward-thinking company and set itself apart from the competition in terms of customer service.

“We were interested in implementing fintech-innovations,” Karpenko continues. “And since NanoFitness has developed a tendency to be the first in the latest and greatest, there was no dispute among our colleagues about taking advantage of this opportunity and offer our clients and partners a higher level of service and interaction.” 

The First of Many Business in Russia?

Given the warming stance toward Bitcoin by the Russia, as its Tax Service recently put cryptocurrencies on equal footing with foreign currencies, NanoFtiness could be the first of many businesses to (openly) begin embracing Bitcoin. This, in addition with the increasing demand for Bitcoin in Russia in general, could create a trend for small businesses who might want to take advantage of cryptocurrency’s benefits.

The climate appears to be changing in Russia for Bitcoin. From threats of an outright ban to the turnaround acknowledgment of Bitcoin as “objective reality” by the government in just a few months.

fitness

Additionally, the company’s staff are already trained in helping their customers use bitcoin. The entrance to each gym also proudly displays a QR code, noting bitcoin as a payment option – something that probably no one could have predicted even as recently as a year ago. 

While a Bitcoin ban appears to be now off the table, Bitcoin is still in a sort of quasi-legal area as a “foreign currency” in the country. Thus, just how the authorities will react to a business accepting a currency other than the Ruble is anyone’s guess. Nevertheless, the future of Bitcoin in Russia appears to be brighter than ever.

Karpenko adds,

We now have a cutting-edge, and I won’t be afraid to say, in-demand instrument corresponding to the spirit of the times of our philosophy. Besides, we’re NanoFitness.

Will other Russian businesses follow or will the authorities clamp down on new payment options? Share your thoughts below!


Images courtesy of shutterstock, econotimes.com, vk.com

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Dub 23

Hullcoin Leads This Week’s Digital Currency News

Source: bitcoin

Data

Want to see which cryptocurrency stories are leading the news? This week, Hullcoin takes the spotlight. Have a look at the rest of the week’s hot news below.

Also read: ShapeShift Leads the Week in Crypto News

HULLCOIN

Approximately 500 investors have been cheated out of nearly $1.1 million by a Chinese investment scheme posing as London-based cryptocurrency platform Hullcoin. Emerging in 2014, Hullcoin’s claim to fame of using digital currency to battle global poverty is now facing a potential stain on its philanthropic reputation as the result of a nasty case of mistaken identity. Those directly involved with Hullcoin claim they have no involvement in the scam.

A website devoted to the investment plot allegedly advertised a number of benefits to potential investors ranging from special promotions to massive returns. The site states:

“At present, the hull currency in the UK and China for synchronous operation, the initial price is $0.1, the price with the market has gone up. As a virtual currency, Hull, the annual income of tens of times is not a problem. Hull currency in China since the trial operation, the achievement of a lot of young entrepreneurs. At present, Hull’s investment in the initial stage, investment costs are relatively low.”

Recently, journalists flocked to an office location in Hong Kong in the hopes of attending what they believed would be a Hullcoin conference, only to discover upon arrival that the address didn’t even exist. Local authorities are actively investigating, although the chances of recovering the lost funds are being labeled as “slim.”

 RUSSIA

After a lengthy anti-bitcoin history, the Russian Federation is purportedly looking into creating its own digital currency, deputy chairman of the Bank of Russia Olga Skorobogatova confirmed at a recent “Blockchain and Open Platforms” conference. Addressing her listeners, Skorobogatova suggested that Russia is finally giving into blockchain technology, and feels it is necessary for the continuation and further development of Russia’s financial operations.

Skorobogatova also expressed the desire for the creation of a blockchain consortium, believing that the minds of several innovators will be necessary to put together a plan that will bring Russia’s monetary systems up to speed.

At the conference, the deputy chairman explained:

“The [blockchain] game isn’t for individuals. Distributed ledger technologies require participants from several platforms with a coherence and understanding of the system.”

COIN EXPLOIT

Cryptocurrency investment firm Coin Exploit is putting together a plan for 2016 that will allow clients to invest with a number of virtual coins including bitcoin, dogecoin, litecoin and paycoin. The company is promising a 200 percent return to all who invest. In other words, its double returns for anyone brave and eager enough.

Aside from its alleged money-making prowess, the platform’s other claims to fame include insurance in investing funds, something rarely witnessed in the world of cryptocurrency, and an affiliate program that grants clients customized affiliate links for their blogs and business websites.

The company’s main page states:

“All transactions in the cryptocurrency market are carried out according to an elementary principle: buy at a lower price, sell at a higher. And, vice versa, respectively – sell at a higher price, buy at a lower. Due to the variability of the exchange rate, we make a great profit on this difference.”

What stories would you like to see recapped in our next industry report? Post your comments and let us know!


Images courtesy of Decision Support Analytics, Operationworld.org, 30btc.com

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Bře 29

The Vanbex Report: Outlawing BTC a Matter of Control

Source: bitcoin

Vanbex Report

Mar. 29, 2016 — On Wednesday (Mar. 23), Russia’s ministry of finance continued on with its pursuit to outlaw the world’s top cryptocurrency, Bitcoin (BTC).

The Vanbex Report is a periodic summary of the blockchain industry’s top news stories from the biggest companies, as well as the most promising newcomers.

Banning BTC?

This time, the new draft for the official banning of the production and circulation of BTC comes attached with punitive damages that could range from million ruble fines to up to seven years in jail and the ceasing of business operations.

Russia’s deputy minister of finance, Alexey Moiseev, as quoted in Russian media outlet RIA Novosti, said: “I hope we will manage to do this in a reasonably short period of time. I believe, we will be able to bring it in before the end of the spring session, but I don’t know if it will be passed in a first reading.”

Currently, BTC is not banned in the country but it is not legal currency either. The finance ministry estimates the law to enter the Duma, Russia’s lower house, by August.

The road with Bitcoin and Russia has been a rocky one for years, stretching back to January 2014 when the Bank of Russia first declared digital currencies as risky, speculative and not legally bound monies. In the same year, discussion of bans and imposement of fines were raised but nothing ever materialized into law.

Russia then took an ambiguous stance against the cryptocurrency last fall, as was reported by Coindesk. It was then unveiled Russia’s central bank did not support the outright banning of Bitcoin, a position that was duly backed by President Vladimir Putin.

Nevertheless, 2016 delivers another push by the Russian finance ministry toward halting Bitcoin-based monetary activity altogether, especially exchange related operations within the country’s borders.

And Russia doesn’t stand alone. Bolivia, Ecuador, Iceland, Kyrgyzstan and Vietnam are other countries that also have some level of ban in place for bitcoin, with China leaning in a similar direction, even going so far as to attempt to usurp the qualities and characteristics presented in bitcoin for its own centrally issued currency.

Also Read: Bitcoin in China: An Insider’s View

In December 2013, the People’s Bank of China and five other related government ministries released an official notice titled, Guarding Against the Risks of Bitcoin, which essentially stated bitcoin may not be used as currency in the country.

The interesting aspect regarding China and Bitcoin is that Chinese miners control at least half of the cryptocurrency’s mining network, concentrating a lot of power over the cryptocurrency’s core transactional function.

The national control over an entity valued at over USD $6.5 billion in market capitalization would presuppose a desire to maintain and develop that source.

But the opposite is true of the Chinese government because the value resides in something that is, as Putin put it, “backed by nothing.”

Furthermore, while governments express concern over terrorist financing and money laundering activity as principled reasons to outlaw the production, circulation and exchange of Bitcoin, the core factor boils down to sovereignty over one’s own system, be it monetary or otherwise.

Also Read: Dutch Central Bank to Create Prototype Blockchain-Based Currency

A decentralized digital currency requires regulation and oversight. This is not a novel thought.

The Russian and Chinese positions show that block-size scaling and billion-dollar valuations don’t matter if the currency exists within a closed-off system or one that cannot be appropriately regulated, pegged to a national or fiat currency and centralized in some form.

Some advocates in favour of the proliferation of cryptocurrency view anonymity and decentralization as an avenue toward a post-regulatory financial system. But as fantastic as that sounds it is beyond the bounds of what can be considered practical — from a point of economic management it’s near to impossible.

Russian government officials prefer the ruble be the only legal currency used in the country and that its central bank be the only legal entity allowed to issue currency, whether in physical or electronic form.

This is about control.

A decentralized currency that lacks any regulatory framework and oversight is a volatile currency — and increasingly, a virtual commodity — better positioned for investment. In addition, it is a currency privy to activity outside the bounds of the common good.

A decentralized cryptocurrency is certainly a revolutionary idea but as revolutionary ideas go, it must occur not at the behest of the current order of things, but beyond it.

Bitcoin’s days may not be numbered, but its current position as a digital currency free of much, if any, oversight is counterintuitive to progressive development of a digital society as a whole.

Disruptive does not mean dissociative, explained Lisa Cheng, Vanbex Group CEO, and despite the failings of government, and what anarchists may advocate, order and enforcement are critical ingredients to ensuring, or at least trying to ensure, the playing field is level.

Whether Bitcoin offers that is subject for another post.

Some news stories from this past week:

Russian Ministry of Finance Proposes Bitcoin Ban

Punishments for use of cryptocurrency could lead to fines, time in jail

The Russian finance ministry is moving to officially ban the production and circulation of the world’s leading cryptocurrency.

In a proposal released last week, the ministry detailed plans to outlaw the use of Bitcoin as legal currency, with aims to impose new penalties on companies and individuals that deal with digital currency.

A fine between three and five million rubles to jail time of up to seven years are being discussed as potential punishments, including the ceasing of business operations for those establishments like exchanges that deal in the cryptocurrency.

Also Read: Is Bitcoin Legal?

Pact Between UK and Australian Regulators

The FCA and ACIS come together to help foment fintech innovation

Regulators in the United Kingdom and Australia signed a cooperation agreement last Wednesday (Mar. 23) stating either party will refer innovative fintech companies to each other’s markets.

Such an agreement between the Financial Conduct Authority and Australian Securities and Investments Commission will help bridge the barrier to access in both markets that, according to Reuters reporting, are “estimated to have annual revenues of around A$12.5 billion (6.6 billion pounds) and A$1.3 billion respectively.”

It will be interesting to see if this develops into a common theme among fintech hubs around the globe as access to talent and progressive policy-making are key aspects to the success of those competing within the emerging industry.

Also Read: Australian Regulators Finalize New Regulations

Hyperledger On Verge of Merge
All but one committee member in favour of three-code amalgamation

The Hyperledger project neared a decision to merge its three central codebases contributed by Blockstream, Digital Asset and IBM at the first Hyperledger Hackathon.

The vote put to the technical steering committee was unanimous in favour of the merge of the Blockstream’s validation code, IBM’s OBC/UTXO Chaincode and Digital Asset Holding’s client layers, except for a single committee member.

The committee member was quoted by Coindesk as stating: “I’m a little concerned about making an agreement until I see something in writing. I’d feel better if we had a little more progress on the requirement side.”

While Philip DesAutels, the event’s emcee, could have went ahead and called a vote given the two-thirds majority requirement for approval set out in the charter would have likely been achieved, the event host backed away from it.

DesAutels also said, “This is open-source, we can take this wherever we want, but we do need to move forward. There’s consensus even if there’s not unanimity.”

The Hyperledger project, established in 2015 and headed by the Linux foundation, is a collaborative effort to advance blockchain technology with a “goal of presenting a clear explanation of what will distinguish the Hyperledger Project from efforts specifically mentioned, including Bitcoin and Ripple.”

Also Read: Hyperledger’s First White Paper

Some Upcoming Events …

Smart Contracts, Blockchain & Data Standards

A free half-day FinTech forum hosted by XBRL US will be held on Apr. 4 in New York City. Speakers from Consensys, ItBit, Markit, Nasdaq, Safeguard Scientifics will be featured. For more information visit:

Money 20/20 Europe

Touted as an “experience for European innovators” and “catalyst for the growth and development of the payments and financial services ecosystem.” To register go to: money2020europe.com/register-2016. Event runs Apr. 4 – 7.

World’s Largest Blockchain Trade Show

Debut in Toronto, Sept. 19-21. For more information visit

Press Contact:

Kevin Hobbs

Email: K@vanbex.com

PH: (604) 379-9032

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Úno 07

Is Russia Going Soft on Bitcoin? – Paying for Phone and Internet Bills via Bitcoin Now made Available in the Country

Source: bitcoin

Is Russia Going Soft on Bitcoin? – Paying for Phone and Internet Bills via Bitcoin Now made Available in the Country

Russia has always been referred as a bitcoin unfriendly country. However, the crypto industry is growing stronger than ever and despite the old stigma that bitcoin is only used by cyber criminals and for money laundering, the industry is still booming in the country.

Also Read:  Russia Blocks Online Bitcoin Exchange in Midst of Blockchain Reform

Since the last submission of a bitcoin ban draft law presented to the Russia’s legislative assembly, the Duma, many deemed as uncertain the future of the digital currency industry. Nevertheless, the cryptocurrency industry continues to flourish and is now introducing new solutions to payment services.

Bitcoin payments made simple

Russian mobile operators such as Tele2, MTS, Megafon and Beeline are now allowing bitcoin payments via two Cryptonator and 7pay.in. These companies have set their aim on the future and have enabled Russians to pay for their Internet and phone bills with bitcoin. This way Russian have now the possibility of using bitcoin payments for Internet and phone bills indirectly since the payment is only done after a conversion into rubles within the platform’s internal price rate. According to Cryptonator, the service’s main advantage is the fact that it does not charge any fees and it greatly simplifies the use of digital currency.

In an effort to increase awareness in Russia, both companies believe that bitcoin payments should be made simple and that’s why they are allowing these new kinds of services to spread across the country.  They are trying to attract the most common users and for that to happen, Bitcoin payments should be made simple. People need to know that bitcoin allows for cheaper and more convenient payments than the conventional payments systems.

The service providers

7pay.in. is an online payment service provider that enables its customers to buy and sell bitcoin and now introduced the freedom to pay for Internet and mobile phone bills using cryptocurrency. The company offers its clients bullet-proof security while maintaining a transparent “modus operandi” and allows audit access to the sites statistics of all processed operations.

Cryptonator is an online multicurrency wallet that combines usability with a high level of privacy, anonymity, and security. This online wallet offers a free multi-cryptocurrency account and accepts online payments for popular games such as World of Tanks, and many others.

Paying indirectly with bitcoin

These two payment service providers enable easy direct transactions and instant exchange between different currencies. This feature is used to automatically exchange bitcoin for Russian ruble and pay the bills. The method is an indirect on-time way of paying for online services with bitcoin.

Russian digital currency-related companies are now seeking to make the use of bitcoin much simpler around the country and this way they are also helping Russians to get more acquainted with bitcoin. Cryptonator and 7pay.in services will now allow Russians to be able to pay their bills with bitcoin, however, when the customer wants to pay with bitcoin the service immediately exchanges them for rubles and automatically pays the bill. The great thing is that the service doesn’t charge extra fees and works pretty fast.

Regulation in Russia

The government even proposed a jail sentence to those using bitcoin. Since the last proposed ban draft in the country, many of the bitcoin enthusiasts and entrepreneurs  have been fearful that if these services become too popular regulators can start to impose sanctions to these companies and start to stifle the industry.  Even so, and for now, there is no reason for alarm as it seems clear that the industry is healthier by the day. The deal about this kind of services is that they only convert bitcoin into rubles and execute payments by using the national Russian currency and so there are no reasons for the Russian government to consider it illegal.

It’s becoming usual to find this sort of payment solutions in many countries. It is a clear sign that bitcoin has now surpassed the first level of adoption, and is already going full mainstream across the globe.

What’s your take on the increasing cryptocurrency establishment in Russia? Let us know in the comments bellow!


Source & Image

 

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Led 23

Russia Blocks Online Bitcoin Exchange in Midst of Blockchain Reform

Source: bitcoin

Russia

Russia blocks one of the largest running cryptocurrency exchanges, BTCe, following BitStamp’s voluntary IP block of its Russian users. These developments are likely a preview of what is to come from enforcement of recent laws criminalizing blockchain technologies and ‘money substitutes’ in the Russian market.

Also Read: The Netherlands Wants Clear Regulatory Guidelines For FinTech and Bitcoin Startups

Russia Can’t Make Up its Mind on the Blockchain

More baffling still is the fact these moves to shut down Bitcoin exchanges are coming after last month’s announcement of a ‘clear road map’ to legalize cryptocurrency in Russia.  This roadmap is a facet of a proposal to deregulate the IT sector called “internet program 2025.” Russian officials claim that only bitcoin, not blockchain technology, is  illegal but refused the legal creation of a Russian altcoin, dubbed BitRubles, by payment processor Qiwi following the passing of this proposition.
Bitcoin ownership in Russia is a criminal offense that carries a maximum four-year sentence and up to 500,000 Rubles (~$19,000 USD.) As it stands, there’s no regulatory framework to enter the crypto market there legally despite conflicting stances of different Russian government bodies on the subject. With the enforcement and legislative sides of this issue seemingly headed in opposite directions, it’s hard to make sense of the crackdown on the online markets as it stands.

A possible explanation for the recent criminal enforcement measures could be the price drop of the Ruble due to falling oil and economic sanctions. The Russian central bank, vocally against Bitcoin and blockchain tech. in general, may be pushing for enforcement to prevent capital outflow that could worsen their situation. With no clear stance on Blockchain implementations outside of Bictoin, and no decriminalization efforts for bitcoin proper, legitimate Bitcoin ownership and  investment remains difficult to impossible.  Until there’s a compliant regulatory ecosystem for crypto in Russia, expect the situation to escalate accordingly.

What are your thoughts on the Russian treatment of bitcoin and of Cryptocurrency regulation in general? Be sure to let us know in the comments!


Source: Forklog

Image courtesy of beastcoins.com

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