This story was delivered to BI Intelligence " Fintech Briefing " subscribers. To learn more and subscribe, please click here . Russia had been in the process of drafting legislation to ban all bitcoin activities, including any operations using cryptocurrencies, since August 2014. This was due to concerns regarding bitcoins’ use in fraudulent transactions, and the Finance Ministry’s intent to avoid undermining the central bank’s role as Russia’s sole currency issuer. This week, however, Russia’s deputy finance minister, Alexei Moiseev, announced that the Finance Ministry will not be imposing the legislation. Moiseev said that the Finance and Justice ministries want to consult experts more closely before making any final decisions. Had the bill gone through, anyone detected using bitcoin would have faced a jail term of up to seven years and significant fines. The decision suggests that the government now believes there may be beneficial uses for cryptocurrencies and associated technologies. We have already seen evidence of this — Russian banks including QIWI Group, Accenture, BINBANK, MDM Bank, Bank Otkritie, and Tinkoff Bank created a blockchain consortium to rival R3 in July. This consortium, unlike an earlier attempt, gained government support. Blockchain technology, which is best known for powering Bitcoin and other cryptocurrencies, is gaining steam among finance firms because of its potential to streamline processes and increase efficiency. The technology could cut costs by up to $20 billion annually by 2022, according to Santander . That’s because blockchain, which operates as a distributed ledger, has the ability to allow multiple parties to transfer and store sensitive information in a space that’s secure, permanent, anonymous, and easily accessible. That could simplify paper-heavy, expensive, or logistically complicated financial systems, like remittances and cross-border transfer, shareholder management and ownership exchange, and securities trading, to name a few. And outside of finance, […]
