Russian Official Calls Qiwi’s Digital Currency Proposal Illegal

272 — A Russian government official has demotivated a leading payment processing company from pursuing its plans to launch a private digital currency.

According to a report of TASS, an official adjudicator Pavel Medvedev warned Qiwi about the legal repercussions they may face while creating a private monetary system in Russia, saying:

“It’s absolutely illegal, such technical hooliganism [is] absolutely inappropriate. The Constitution says who has the right to Russia to issue money — it is the central bank. The only currency in Russia is the ruble.”

Just a few days ago, Moscow-based Qiwi had introduced its plans to create a Bitcoin-like digital currency that will virtualize the Russian national currency Ruble. The company’s CEO Sergey Solonin was the first to break the news during an interview to Russian business daily Kommersant, saying that they will discuss the project with the Russia’s central bank in coming days.

However, Russia is already known for its strict stand against any form of virtual money. The country has previously banned the use and trade of virtual currencies such as Bitcoin, a law which, if violated, could also lead to hefty fines. Just a few months back, president Vladimir Putin also spoke against the Bitcoin, saying that its main problem is decentralization.

Earlier, the Central Bank of Russia has also issued warning against the use of virtual money in one laundering and financing terrorist activities. Solonin, however, has indicated that they are creating a user identification system that would easily associate the digital currency with its respective owner.

At present time, it is impossible to predict how the Russian regulators will treat Qiwi’s project.

We will continue to monitor this story.