The State of California has repealed sections of its Corporations Code that restricted the use of Bitcoin and other digital currencies as “money”.  This leniency towards Bitcoin is extremely positive for digital currencies and may change how other states, and even countries, change its views towards it.

Could that be why Russia has also loosened its reigns when it comes to digital currencies? This week, it was reported that Russia’s central bank has now decided it won’t hamper the use of digital currencies, after previously warning people against them.

Georgy Luntovsky, the Bank of Russia’s first deputy chairman, was quoted by The Wall Street Journal as saying that it would not block the use of Bitcoin. He added that the central bank is now gathering more information about digital currencies to be better informed as to how to proceed with their usage.

“At this stage we need to watch how the situation develops with these kinds of currencies. These instruments should not be rejected,” Luntovsky said.

Earlier this year, Russia’s general prosecutor stated that “Anonymous payment systems and crypto-currencies, including the most popular one, Bitcoin, are money surrogates and cannot be used by citizens or legal entities”. He added that using these types of currencies would be seen as participating in illegal transactions, and possibly even funding terrorists.

Bitcoin has attracted a few shady dealers due to its anonymity, which makes it ideal for illegal transactions involving the sale of drugs, weaponry, and child pornogpraphy etc. But only a very small section of Bitcoin users are believed to engage in such activities.

Meanwhile, advocates are exerting a lot of effort to steer Bitcoin in the right direction. Several notable companies have started accepting Bitcoins alongside fiat, including Dish and NewEgg.com. We’ve even seen brick-and-mortar shops open the doors to Bitcoin. Business owners who accept Bitcoin say it’s preferable to processing credit card payments because the money is received instantly, and there are no transaction fees to worry about.

Luntovsky doesn’t dismiss that Bitcoin is sometimes used for illegal transactions and they have evidence to prove that such transactions have taken place in Russia. Even so, it looks like Russia has realized digital currencies are here to stay whether it likes them or not, and now it has to work out how it can be used to its advantage.

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