Russia proposes a complete ban on cryptocurrency, which includes mining and the use thereof. The country’s Central Bank suggested that the trading of cryptocurrencies must come to a stop immediately. This regulatory step was suggested by the Russian government and the Bank of Russia in an online conference. The blanket ban on cryptocurrency was linked to financial instability and growing illegal activity. The digital asset apparently posed a serious threat to the sovereignty of Russia’s monetary policy. Russia is third in bitcoin mining, after the United States and Kazakhstan.
After the Central Bank of Russia showed interest in getting information from commercial banks regarding private money transfers, this ban on cryptocurrency was recently implemented. The Central Bank of Russia stated that it will collect information about individuals who traded cryptocurrency previously, both within and outside the country. Although Russia has legalized cryptocurrency in 2020, the country remains skeptical about accepting it as an exchange medium. 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. This has led to the Central Bank forming new regulations and laws that could ban Russia’s digital asset.
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Russia had previously expressed concerns about cryptocurrency because they believed the asset could be used to finance terrorism and money laundering. According to reports, Russia is interested in creating its own digital currency (CBDC), which would enable, equip, and ultimately empower future banking operations in the country.
Russia could benefit from this change, which will allow them to make a more simple and seamless payment. According to the report, mutual fund investments in crypto will be prohibited. Institutional investors are also discouraged from investing 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. Failure to adhere to the mandated resolution mentioned above will lead in the report to severe punishment.
There has been a lot negative media attention about the growth of crypto markets. Source: TOTAL-CRYPTOCAP, TradingView.com| Source: TOTAL-CRYPTOCAP on TradingView.com