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Sorry Mr Bank, but you can't just ban Bitcoins

0 10 February 2014

While the Russian Central Bank’s decision to declare virtual currency transactions illegitimate has effectively prohibited their real-world use on Russian territory, experts reckon that the authorities will have a much harder time preventing Russians from using virtual currencies online. 

The authorities are clearly taking the matter very seriously, and recently announced that the Interior Ministry (MVD) and Security Services (FSB) will be cooperating with the Central Bank to ensure that virtual currencies are not being used. 

Companies which previously allowed the use of bitcoins for real world purchases, such as the Killfish chain of bars, responded to the Central Bank’s statement by ceasing to accept bitcoin payments. Killfish also gave up on plans to pay for advertising using bitcoins, while retailer Yulmart announced that its plans to allow bitcoin payments had been abandoned.  

However, antivirus expert Sergey Lozhkin of Kaspersky Lab says that the authorities won’t be able to prevent the use of virtual currencies online. 

“The state is trying to block the conversion of traditional money into bitcoins using legal and economic means. The next step is likely to address the web, but it is destined to fail. While it is possible to block transactions for those using an unsecured IP-address, any attempts to do so will simply force bitcoin fans to make transactions using secure IP servers (SSL, VPN or others).”

Victoria Nosova, security consultant at Check Point Software Technologies, said that 

“The decentralized and anonymous nature of virtual currencies mean that no attack can threaten the entire network’s existence. The only vulnerable elements are the points of exchange.”

It seems that while the Central Bank has won the first battle, the war has just begun. 


Top image via Shutterstock

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