Russia has proposed a full ban on crypto, this includes both mining and use of cryptocurrencies. The country’s Central Bank suggested that the trading of cryptocurrencies must come to a stop immediately. In the report put forth in an online press conference, the Russian government along with the Bank of Russia suggested this regulatory measure. This blanket ban on cryptocurrency was tied to risks of financial instability and rising illegal activities. The digital asset apparently posed a serious threat to the sovereignty of Russia’s monetary policy. Russia holds the third rank in bitcoin mining after US and Kazakhstan.
This recent ban on cryptocurrency comes right after the Central Bank of Russia displayed interest in securing information from commercial banks in respect to private money transfers. It also specified that the information collected will comprise of details of individuals who have previously traded in cryptocurrency, not only within the country but also outside of it. Despite Russia legalising cryptocurrencies in the year 2020, it always remained sceptical in regards to accepting the same as a medium of exchange. The report stated that this measure of banning crypto might after all be in favour of Russial as this decision happens to be the “best” and “optimal” one that safeguards Russia.“Cryptocurrencies: Trends, Risks, Measures”
In the report, “Cryptocurrencies: trends, risks, measures” an excerpt read that cryptocurrenices “offer an outlet for people to take their money out of the national economy, thereby undermining it and making the regulators job of maintaining optimal monetary policies harder.” The other major concern that led to this ban was the ever increasing dynamic and volatile nature of cryptocurrency along with illegal activities being funded by the digital asset. The culmination of which has urged the Central Bank to form new laws and regulation which could help ban the digital asset in Russia.
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Russia previously also expressed its concerns around cryptocurrency as they believed that the asset could be used for money laundering and even financing terrorism. Reportedly, Russia has showed interest in creating thier own digital currency (CBDC) which is believed to enable, equip and finally empower the functioning of future banking in the country.
This could help people of Russia to opt for a quicker, easier and more seamless payment option. The report also stated that there will be a prohibition of mutual funds investments in cryptocurrency. Besides that, institutional investors have also been discouraged from investing in crypto. This move might be quite a blow to the country’s financial organisations as any cryptocurrency in the form of a financial asset will not be accounted for. Failing to abide by the above mandated resolution will result in firm punishment as mentioned in report.
The crypto industry's growth has attracted a lot of negative attention | Source: TOTAL-CRYPTOCAP on TradingView.com Russia Crypto Ban Extends To Mining Also
Cryptocurrency mining in Russia has a major footing as the country is the third largest when it comes to mining of cryptocurrencies. Volume of cryptocurrency mining still remains the highest in the US, followed by Kazakhstan, however, the latter has been in talks about cutting off electricity provisions. This news about Russia’s ban might potentially drive crypto enthusiasts across the globe up the wall. Minimising of crypto issuance along with over-the-counter trading desks, crypto exchanges and peer-to-peer exchanges could send a ripple across the whole crypto space.
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The aforementioned report also added that this prohibition was also because of environmental factors as it creates “”creates a non-productive electricity expenditure, which undermines the energy supply of residential buildings, social infrastructure and industrial objects, as well as the environmental agenda of the Russian Federation.Featured image from iStockPhoto, Charts from TradingView.com