A report presented by the Central Bank of Russia on Thursday (20) suggests that the country should completely ban cryptocurrencies.
Portal report Coindesk states that the proposal was made by Elizaveta Danilova, director of the Financial Stability Department at the Bank of Russia, in a report entitled “Cryptocurrencies: Trends, Risks and Measures”.
The executive presented the material during an online press conference.
The report says that cryptocurrencies are volatile and widely used for criminal activities. In addition, it points out that the ease with which they allow the mobility of assets between countries makes it difficult for the State to implement its monetary policy.
The conclusions were that Russia needs new laws that can effectively ban cryptocurrencies and activities related to the sector.
According to the report of the North American vehicle, the executive suggests that the ban should apply to brokerages (exchanges) and peer-to-peer platforms (where users interact without intermediaries).
Russia and Cryptocurrencies
The relationship between Russia and the cryptocurrency market has been difficult, to say the least. The country is the world’s third-largest player in bitcoin mining, behind the United States and Kazakhstan, according to Reuters.
In 2020, Russia passed a law that legally recognizes cryptocurrencies like Bitcoin – but does not allow them to be used to buy anything.
The third update to the law recognizes a digital currency “as an aggregate of electronic data capable of being accepted as a means of payment” and confers legal status, but adds that it “cannot be used at the same time to pay for goods and services.
In July last year, the Russian government revealed that it was drafting a law to allow regulators to confiscate bitcoin and other cryptocurrencies that have become sources of income from crime.
Also in July 2021, the Central Bank of Russia published a release recommending that the country’s exchanges not trade cryptocurrency-based financial products, including bitcoin-backed index funds (ETFs). But until then, there was no talk of banishment.
Putin and Bitcoin
Russian President Vladimir Putin first waved to the cryptocurrency market in October last year; on one side biting and on the other blowing.
“I think that [as criptomoedas] has value. But I don’t think they can be used for the oil trade,” said the European leader during the Energy Week in Russia.
Putin addressed the issue when answering a question from the American broadcaster CNBC. The Russian president said he thought it was “too early” to talk “in exchange for energy resources for cryptocurrencies”, since digital money is not yet “supported by anything”.
According to CNBC, Putin also said that energy consumption to mine cryptocurrencies is a barrier to large-scale adoption.