Bitcoin May Be Legalised in Russia: Central Bank Deputy Chairman

The Bank of Russia may consider legalising popular digital currency bitcoin, as the central bank softens its earlier stance on crypto-currencies saying they may be "the future."

Russia Today reported that the Bank of Russia is ready to legalise the bitcoin, despite the big risks and setbacks the digital money has experienced.

"We advocate a careful approach to bitcoin and are monitoring the situation along with the Bank for International Settlements," Gazeta.ru quoted Georgy Luntovsky, the Bank of Russia's deputy chairman, as saying. Luntovsky was speaking at the annual International Banking Congress in St Petersburg.

"One can't ignore this instrument, maybe this is the future," Luntovsky added.

"Maybe at some time we'll take a decision about the legislative regulation of this question."

Luntovsky also noted that the central bank is studying bitcoins together with the government.

In February, Russia's Prosecutor General's Office banned the use of any sort of monetary substitute for the country's official currency, the rouble. The office noted that digital currencies such as the bitcoin are often obtained illegally and used for money laundering.

That was after the Central Bank issued a statement, warning consumers against the risks of digital currencies. It noted that the anonymity of the digital currencies allows people to involve in illegal activities such as money laundering and terrorist financing.

The current softened tone reflects the growing popularity of the bitcoin, despite its setbacks. The number of retailers who accept the digital currency as a payment option has been increasing, as it gains in popularity and value.

Bitcoin was launched in 2008 and is traded within a global network of computers. Virtual currencies are not backed by any country or central bank and can be transferred without going through banks or clearing houses, and without the associated fees.

Transactions in bitcoins are done anonymously over peer-to-peer networks, and this feature has been a serious concern for regulators.

Critics say bitcoins could be used for drug transactions, money-laundering and other illegal activities due to the near anonymity of those who deal in it.

A number of regulators across the globe have warned consumers about risks of digital currencies.