A report from the Central Bank of Russia proposes to outlaw the trading, mining, and use of cryptocurrencies in the country.
Russia must ban cryptocurrencies, the country’s central bank said in a document published today by the authority and reported by the media. Coindesk.
The report, “Cryptocurrencies: trends, risks, measures”, was presented during an online press conference with Elizaveta Danilova, director of the Financial Stability Department of the Bank of Russia.
This document is very negative about cryptocurrencies. It highlights that crypto is volatile and widely used in illegal activities such as fraud. It adds that by offering an outlet for people to get their money out of the national economy, they risk undermining it and making it harder for the regulator to maintain optimal monetary policies.
Therefore, the bank suggests that Russia needs new laws and regulations that will effectively ban any crypto-related activity in the country.. In particular, it says that the issuance of cryptocurrencies and the organization of their circulation in Russia should be prohibited. The ban should apply to exchanges, over-the-counter trading desks, and peer-to-peer platforms.
Do not allow investment
In addition, it adds that the existing ban on the use of crypto for payments should be reinforced, and a penalty should be introduced for the purchase or sale of goods, services and labor by Russian individuals and companies.
Likewise, the report says that Russian institutional investors should not be allowed to invest in crypto assets and no Russian financial organization or infrastructure should be used for cryptocurrency transactions. The Bank of Russia had already prohibited in December 2021 mutual investment funds from investing in cryptocurrencies. Now, he suggests introducing a punishment for breaking this ban.
Cryptocurrency mining, which has flourished in Russia in recent years and even garnered some nods of approval from the country’s parliament last year, has also come under fire from the bank.
Mining creates a new supply of cryptocurrencies, thus stimulating demand from other crypto services such as exchanges and “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”, says the report.
The “optimal solution” would be to ban crypto mining in Russiathe regulator said in the report.
The central bank plans to monitor cryptocurrency transactions by Russian residents and coordinate with countries where cryptocurrency exchanges are registered to obtain information about transactions by Russian users, the report says.
The regulator believes that in the future, the improvement of the current banking infrastructure, as well as the introduction of the digital ruble, a central bank digital currency (CBDC) currently being worked on by the Bank of Russia, will cover the need for Russians to obtain fast and cheap money, giving them digital payment options and giving them crypto advantages without crypto.
As for the investment attractiveness of crypto assets, it may be replaced by digital assets, which will be issued in Russia under the law on digital assets, effective from the summer of 2020, the Bank of Russia said.
Previously, the Bank of Russia said that Russians conduct more than $5 billion worth of crypto transactions in a year, but did not clarify how this number was calculated.
It is worth remembering that on countless occasions the Russian government has expressed its rejection of cryptocurrencies, but in this sense it has had a bipolar attitude, because on some occasions it has supported them, such as in October 2021, when it was said that they could help in the de-dollarization plan.
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