Economics

Russia Bans Bitcoin

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Large image on homepages | zcopley / Foter.com / CC BY
(zcopley / Foter.com / CC BY)

Don't try to do Winter Olympic business in the currency of tomorrow, today!, Bitcoin.

Why not? Russia's Prosecutor General announced today, reports Fox News:

"Bitcoin is a money substitute and cannot be used by citizens and legal entities," the agency's press release reads.

The Russian law enforcement agency cited an existing 2002 law signed by Russian President Vladimir Putin that reads, "the official currency of the Russian Federation is the ruble. Introduction of other monetary units and money substitutes is prohibited."

Has this Russian maneuver destroyed market desire for the digital currency? Not quite:

The price of bitcoin on Coinbase.com, the largest American site for buying and selling bitcoins, fell from about $780 before the Russian announcement to $700, before rising back to $750 by mid-day Friday. The price may also have been affected by financial problems at the Japanese bitcoin exchange MtGox.

I wrote last year about how governments can and will try to hobble, but are unlikely to be able to destroy, Bitcoin.