Russia Bans Bitcoin

The Russian government has outlawed the use of Bitcoin.

Bitcoin and other cyber currencies are "money substitutes and cannot be used by citizens or legal entities," the Russian Prosecutor General's Office says in a press release issued Feb. 6. Russian law prohibits the use of monetary units other than the ruble.

The Prosecutor General's Office says that it is working with Russia's central bank and law enforcement agencies to crack down on money laundering and other criminal activities perpetrated with cyber currencies, Reuters reported Feb. 9.

People and companies who use Bitcoin "risk being drawn — even unintentionally — into illegal activity, including laundering of money obtained through crime, as well as financing terrorism," Russia's central bank said last month.

China cited similar concerns when it banned financial institutions from accepting Bitcoin transactions in December. It also ordered payment providers to stop clearing Bitcoin exchanges.

Regulators in the United States and the European Union appear to have adopted a more tolerant approach to digital currency.

"Developed world governments are in a position…that they're giving these innovations a chance," Adam Shapiro, director with Promontory Financial Group, said in an interview last week with PaymentsSource's Bailey Reutzel. "There are reasonable people in the industry that are persuading these governments of the advantages coming out of this technology."