In a report released Thursday, the Russian Central Bank called for a general ban on trading and mining of domestic cryptocurrencies.
The report titled “Cryptocurrencies: Trends, Risks, Measures” compare cryptocurrencies with a Ponzi scheme and calls for a complete ban on their use throughout Russia. The authors claim that cryptocurrencies are highly volatile in nature and are used as a tool for illegal activities. The report also warned that cryptocurrencies could pose a risk to financial sovereignty and could help people take money out of the national economy. The report said:
“The potential financial stability risks associated with cryptocurrencies are much higher for emerging markets, including Russia.”
The Russian central bank has demanded a complete ban on over-the-counter (OTC) trading services, cryptocurrency exchanges, and peer-to-peer exchanges. The report also called for tightening the ban on crypto payments and introducing strict punishment for any violations.
The central bank report further proposes a complete ban on crypto mining in the country, claiming that mining activities create new supplies, leading to demand from other crypto services such as exchanges. Crypto mining could undermine the existing green energy agenda and also disrupt Russia’s energy supply. The official newspaper said:
“Crypto mining creates unproductive 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.”
Russia became the third Bitcoin mining center (BTC) largest after China’s crypto mining ban in May. yesIf acted upon, the latest proposal for a blanket ban on crypto mining in the country could lead to another realignment on the global crypto mining map.
According a Bloomberg inform, Russia’s Federal Security Service (FSB) was instrumental in moving the ban forward, as it pressured the central bank’s governor, Elvira Nabiullina, to follow a hard-line course. The report says that the FSB is concerned about the increasing number of untraceable funds to opposition parties and media via crypto.
The report is framed as an invitation to public discussion, with a deadline for comments and suggestions from interested parties set for March 1, 2022.
Russia’s central bank has been skeptical of cryptocurrencies for quite some time. However, what could be seen as signs of President Vladimir Putin’s interest in and understanding of cryptocurrencies led some to believe that the Russian government might opt to regular decentralized industry instead of banning it.