MOSCOW (Parliament Politics Magazine): Russia’s central bank advocated a total ban on the use and manufacture of all cryptocurrencies, citing threats to the country’s financial system and ecology.
Cryptocurrency has all the signs of a pyramid scheme and threatens monetary policy sovereignty, according to a paper released by the central bank on Thursday. It also targeted mining, claiming that it harms Russia’s green programme, jeopardises the country’s energy supply, and intensifies the bad impacts of the growth of cryptocurrencies thereby creating incentives for bypassing attempts at regulation.
The central bank stated, “Potential financial stability concerns linked with cryptocurrencies are substantially larger for emerging markets, including Russia.”
Russia has already prohibited the use of cryptocurrency for payments, and the central bank banned mutual funds from investing in the cryptocurrency in December. Individuals and firms who break the regulations should be held accountable, according to the report that came out on Thursday, which estimates that Russian cryptocurrency trading turnover is around $5 billion per year.
The head of financial stability department of the central bank, Elizaveta Danilova, said during an online briefing on Thursday that the proposals would not apply to Russian assets held abroad, but the people with offshore exchange accounts would be able to trade crypto.Â
The head of financial stability department of the central bank, Elizaveta Danilova, said during an online briefing on Thursday that the proposals would not apply to Russian assets held abroad, but the people with offshore exchange accounts would be able to trade crypto. Â
While any prohibition would have to be enacted into law before effectuating, Speaker of the Lower House of Parliament Vyacheslav Volodin indicated this week that establishing a framework for regulating this will be a top priority for the State Duma in the upcoming spring session.
Russia has a strong mining business, which has grown in importance since China declared crypto-related transactions to be illegal financial activity and promised to eradicate digital asset mining. Crypto mining consumes a lot of electricity and requires a lot of computing power.
Last year, Russia became the world’s third largest cryptocurrency miner. BitCluster, Minespot, and BitRiver are some of the most well-known companies in the field.
The co-founder of BitCluster, Vitaliy Borschenko, stated over the phone, they hoped that the given suggestion would be debated with the industry.Â
The key concern of the central bank was that cryptocurrency would not be traded in Russia, and crypto mining posed no risk in that regard, he added.
