Russia Abruptly Announces Crypto Ban for So-Called “Ordinary People”

In Soviet Russia, cryptocurrency mines you.

It is “hard to argue cryptocurrency is not a pyramid scheme”, said Alexey Moiseev, Russia’s Deputy Finance Minister, earlier today. The statement, which was made during an interview on a local television channel, comes in the midst of an abrupt set of plans to ban the sale of cryptocurrencies in Russia for “ordinary people”.

Apparently, “qualified investors” will still be allowed to participate in the cryptocurrency market. “Not private ones”, said Moiseev. “For ordinary people, there’s no way…these are very dangerous investments that could lead to loss of money.”

The ban would prevent investors from obtaining or selling cryptocurrencies from any other platform than the Moscow Stock Exchange. Exactly how the government will keep its citizens from buying cryptocurrency is unsure, but banning crypto exchange websites seems to be par for the course.

The decision to ban comes at a rather odd time–just two days ago, Russia’s First Deputy Prime Minister, Igor Shuvalov, said that he supported the creation of the so-called BitRuble on national television. The BitRuble is currently under development with the Russian National Bank, and seems to be unaffected by the ban. As a side note, Burger King Russia also announced that it would be creating its own cryptocurrency called “WhopperCoin” earlier today. 

Additionally, the Russian government announced plans just weeks ago to create the Russian Miner Coin, a coin that would compete with the Bitcoin mining industry in China. The project was led by Dmitry Marinichev, an aide to Vladimir Putin. At the time, Bloomberg reported Marinichev said, “Russia has the potential to reach up to 30 percent share in global cryptocurrency mining in the future.”

Fascist Undercurrents Could Be at Play

The Russian government claims that the proposed ban serves the purpose of protecting the Russian people from malicious pyramid schemes, but it’s not hard to think of a few other reasons that the Russian government wouldn’t want its citizens to be investing in and transacting with digital assets that the government itself has little control over.

It certainly wouldn’t be the first time that the Russian government has justified bans and censorship by claiming that it’s for the “good of the people”. For example, Russian internet censorship laws were originally used to ban criminal content, such as child pornography and information on drug production.

However, the laws have since been used to block any content that criticises the Russian government. One of the most recent instances of censorship was that of an image of Vladimir Putin as “a gay clown” created by A.V. Tsetkov, a social media activist.

According to the Human Rights NGO Agora, internet censorship increased ninefold from the years 2014-2015.

Bans Could Harm Russia in the Long Term

Blockchain technology is here to stay. There are “no buts about it”–the technology has the potential to increase the efficiency and security of a myriad of different systems in different fields all over the world. Additionally, the technology offers unprecedented potential to empower the world’s most impoverished individuals and communities.

In the poorest and most underbanked regions of Africa and Asia, cryptocurrency is providing new avenues for financial services that empower the people who live there. The ban would deny these opportunities to the most impoverished regions of Siberia, where access to cryptocurrency could have the most positive effect.

Russia’s poverty rate hit a decade-long high of 13.7% (19.8 million people) in 2015, the last year for which such statistics are available. If the Russian ban is put into effect, ordinary Russian people are at risk of missing a serious opportunity for potential earnings and generally “keeping up” with the global world of fintech.