Russian Ministry of Finance has delivered a new legislative proposal seeking to impose penalties of up to 4 years in jail on those who mine and use bitcoins.

As stated by the prominent Russian newspaper Izvestia, the Ministry sees bitcoin digital currency as so-called 'surrogate money', considering transcactions with bitcoin illegal.

The Ministry of Economic Development supports the initiative.

“Surrogate money, including bitcoin digital currency, is backed by nothing, and there are no legal entities responsible for its release. Transactions with surrogate money are speculative, bringing high volatility risks,” says Elena Lakshina, The Ministry of Economic Development representative.

The proposal will soon be submitted to the Russian Parliament.

Andrei Krutov, the member of the Parliament's lower chamber, Duma, believes that bitcoin poses a threat to Russian sovereignty.

Earlier this autumn, Russian Ministry of Finance proposed sentencing anyone who mine, buy or sell cryptocurrencies to correctional work or a fine of up to 500,000 rubles (about $8,000). It also prepared an update to the law “On information, information technologies and protection of information” limiting access to sites which promote “surrogate money” transactions.

Still,  the head of the Russian largest bank and the Central Bank Governor speak in favour of bitcoin, thus making the public discussion on the use of virtual currencies even more heated.

Maria Rudina