The growing enthusiasm for Bitcoin as a viable alternative investment in these evolving economic times has had the equivalent of a bucket of water thrown over it, at least as far as Russian investors are concerned.
Economic Development Minister Maksim Oreshkin defended President Vladimir Putin’s decision to “protect” ordinary Russian citizens from the potential volatility of cryptocurrencies by putting a nationwide block on websites that sell them.
Addressing an audience of young pioneers at the World Festival of Youth and Students in Sochi, he said that investments with unpredictable characteristics should not be accessible to amateur investors and that Bitcoin investment is “worse than casinos,” as the unwary can follow initial gains with catastrophic losses and “be left with nothing.”
Russia’s anti-gambling stance
It could be that both President Putin and his minister have more on their minds than protecting the Russian populace from volatile investment markets and that the casino links are used advisedly. Bitcoin is one of the most popular payment methods for online gambling from countries where local legislation prohibits direct payment methods. There are a vast number of online casinos, such as those listed on https://www.thecasinodb.com, and many accept Bitcoin payments.
For gamblers based in the US, this is perfect. Even for Americans living in states where casinos are prohibited under state law, there is nothing to stop them visiting sites in other jurisdictions and using Bitcoin as a payment method.
But while the rules in the US vary from state to state, Russia’s position on online gambling is clear. It is illegal, period. President Putin has already alluded to concerns that Bitcoin could be used for money laundering and organized crime, but could his real concern be that it will provide an easy way for Russian citizens to indulge in some online gambling?
Who is affected?
Russia’s decision does not imply a wholesale prohibition on Bitcoin, but it does mean that only “qualified investors” will be allowed to access the markets. These are defined as those who have at least RUB 6 million (around $100,000) in their trading account and make a minimum 40 transactions per year that turn over at least RUB 6 million.
In other words, there is a drive to prevent everyday citizens from having any sort of Bitcoin balance to spend anonymously online.
You might wonder how the state plans to enforce this, but the truth is that although a significant number of Russians do flout the rules and find ways to access overseas online casinos, the loopholes are closing and internet control is getting stronger.
Is bitcoin really that volatile?
On the face of it, there is no denying that the Russian leadership has a point. The value of Bitcoin has seen extreme volatility over recent months. However, this has generally been down to external influences, such as the latest Russian headlines and the recent crackdown in China. However, whatever the world throws at it, Bitcoin keeps bouncing back, and people keep investing. Whether President Putin likes it or not, Bitcoin is here to stay.