Russia has recognized the increasing popularity of Bitcoin and its potential to solve a range of issues plaguing the current financial system.The country which has been against the use of cryptocurrency for transactions within the country is now planning to assign a legal status to the digital currency to pave the way for a more structured crypto-ecosystem in the country.Russia’s move to recognize the legitimacy of Bitcoin as a currency closely follows the recent developments in Japan where cryptocurrencies are now legal mode of payments.Assigning a legal status to Bitcoin as a currency not only makes it much easier for the community members to use the cryptocurrency for a wide range of applications, including payments for their daily needs, it also brings in more accountability, opening doors for newer regulations governing the use of Bitcoin in the country.Reports indicate that the Russian Finance Ministry is preparing for a new financial revolution, starting sometime next year.By recognizing Bitcoin and other cryptocurrencies as legitimate currencies, the country also intends to implement regulations against money laundering and illegal transfers.

Alexey Moiseev, the Deputy Finance Minister of Russia, described the extent of regulations the country plans to implement in the sector by saying, “The state needs to know who at every moment of time stands on both sides of the financial chain.bitcoin hard drive rubbish dumpIf there’s a transaction, the people who facilitate it should understand from whom they bought and to whom they were selling, just like with bank operations.” The government’s vision to monitor all transactions and parties to these transactions seems a bit overreaching and with various blockchain analysis tools, it has become quite easy to do so.ethereum trend linesThe financial governance and regulatory bodies are expected to take a decision regarding Bitcoin’s legal status in the next few months.bitcoin patreon

Once the decision is finalized, the concerned departments and ministries will start drafting new regulations and compliance requirements for Bitcoin platforms and the cryptocurrency community.ethereum price history wikipediaBitcoin is up nearly $100 in the past week, hitting levels not seen since mid-March after Japan legalized the cryptocurrency as a payment method and Russia is seeking to regulate it too.buying bitcoin through myceliumThe digital currency was trading at around $1,223.04 at the time of publication, up from highs of $1,124.88 on April 5, and hitting prices not seen since March 16, according to Coindesk data.bitcoin pool germanyBitcoin has suffered a recent dip in price thanks to a debate over the future of its underlying technology, but the recent support appears to have come from Japan.legitimate bitcoin exchange

Earlier this month, Japan began accepting bitcoin as legal currency with major retailers backing the new law.litecoin transfer feeConsumer electronics retailing giant Bic Camera began accepting bitcoin last week.precio bitcoin 2011Bitcoin trading in Japanese yen is the second-most liquid market globally, according to data compiled by cryptocurrency trading platform Gatecoin."The Japan virtual currency act has likely had a major impact, as there has been a lot of buzz in Japanese media over the ruling over the last few months," Aurélien Menant, founder and CEO of Gatecoin, told CNBC by email.At the same time, Russia, one of the strongest opponents of bitcoin is seeking to regulate the digital currency.Russian Deputy Finance Minister Alexey Moiseev told Bloomberg in an interview this week that the authorities hope to recognize bitcoin and other cryptocurrencies as a legal financial instrument in 2018 in a bid to tackle money laundering.

"The state needs to know who at every moment of time stands on both sides of the financial chain," Moiseev told Bloomberg."If there's a transaction, the people who facilitate it should understand from whom they bought and to whom they were selling, just like with bank operations."Increasing state regulation around bitcoin could make the cryptocurrency an attractive investment for investors who previously shied away from it due to the high risk and price swings.Legal The European Union has passed no specific legislation relative to the status of the bitcoin as a currency, but has stated that VAT/GST is not applicable to the conversion between traditional (fiat) currency and bitcoin.VAT/GST and other taxes (such as income tax) still apply to transactions made using bitcoins for goods and services.[1]:European Union In October 2015, the Court of Justice of the European Union ruled that "The exchange of traditional currencies for units of the ‘bitcoin’ virtual currency is exempt from VAT" and that "Member States must exempt, inter alia, transactions relating to ‘currency, bank notes and coins used as legal tender’", making bitcoin a currency as opposed to being a commodity.[2][3]

According to judges, the tax shouldn’t be charged because bitcoins should be treated as a means of payment.[4]According to the European Central Bank, traditional financial sector regulation is not applicable to bitcoin because it does not involve traditional financial actors.[5]:5Others in the EU have stated, however, that existing rules can be extended to include bitcoin and bitcoin companies.[6]The European Central Bank classifies bitcoin as a convertible decentralized virtual currency.[5]:6In July 2014 the European Banking Authority advised European banks not to deal in virtual currencies such as bitcoin until a regulatory regime was in place.[7]In 2016 the European Parliament's proposal to set up a taskforce to monitor virtual currencies to combat money laundering and terrorism, passed by 542 votes to 51, with 11 abstentions, has been sent to the European Commission for consideration.[8]The European Commission also notably presented a "parallel" proposal aimed at preventing tax evasion techniques as revealed in the Panama Papers.[9]