January 30, 2014. The Central Bank feels that as this virtual currency is issued anonymously, private individuals and legal entities might (even accidentally) get involved in some unlawful activities, Bank Koltso Urala states.

‘The Bank of Russia warns both private individuals and legal entities, lending institutions and non-lending financial institutions first and foremost, against the use of ‘virtual currency’, that is, exchanging this for goods (work, services) or legal tenders such as rubles or foreign currency. According to Article 27 of the Federal Act on the Central Bank of the Russian Federation (the Bank of Russia), it is illegal to issue any quasi-money on the territory of the Russian Federation,’ the Bank of Russia’s press service says.

This is why the Central Bank intends to classify such attempts as ‘potential involvement in dubious transactions under the law on anti-money laundering and counter terrorist financing’. This will touch upon both exchanging bitcoins for rubles or foreign currency and using them as legal tender.

‘Bitcoins are a virtual currency invented by a person or a group of people who use an assumed name of Satoshi Nakamoto. The growing exchange rate and the money-laundering potential of this ‘currency’ have aroused a lot of interest lately. People who are considering investing in bitcoins must be aware of very high risks, as this financial instrument has no economic foundation whatsoever,’ says Bank Koltso Urala’s Monetary & Financial Transactions Director Igor Nesterovitch.

He believes the Bitcoin has all the characteristics of a ‘soap bubble’ that could explode in the fashion of a financial pyramid scheme.