The Central Bank of Russia issued a consultation document this Thursday (20) entitled Cryptocurrencies: Trends, Risks and Regulation, whose main focus is to influence other authorities to ban both mining and use of cryptocurrencies such as Bitcoin by their citizens.
In its five pages, two of them without information, the BC of Russia makes attacks that have already been refuted even by state bodies such as the CIA. That is, to argue that BTC is widely used in crimes is very weak, even more so in 2022.
On the tightrope between earning revenue through taxes or continuing to have control over its citizens’ finances, this Russian soap opera seems far from over. Despite this, it is worth noting that no attitude will surprise the market.
The document issued by the Central Bank of Russia begins by analyzing the size of cryptocurrencies. With data from December 2021, he cites a market capitalization of 2.3 trillion dollars, as well as the volume of transactions by Russians, estimated at 5 billion dollars per year.
Going further, he also cites the growth in the volume of Bitcoin ETFs, available in countries such as the USA and Brazil, as well as the expansion of the decentralized finance (DeFi) sector that today has several uses.
While this may seem like good news for cryptocurrency lovers, the Russian Central Bank does not seem so happy with these numbers.
Following the text, the BC states that this growth of cryptocurrencies is a threat to financial stability. As an example, he cites the high volatility of this market and the conversion from Russian ruble to other currencies.
However, the most important point is the comparison between dollarization and cryptonization, in which the Central Bank of Russia claims that, in both cases, it makes it lose power over economic decisions in its own country.
Russia wants to ban mining and use of Bitcoin
After presenting its arguments, the Central Bank of Russia then states that it is necessary to ban both mining and the use of cryptocurrencies such as Bitcoin. As an example, the BC cites China, the main highlight in the fight against freedom.
The three proposals are these below, the first one aims to prohibit the use of cryptocurrencies as a currency and the second is related to mining and token creation, the last one is related to indirect investments such as ETFs.
- “Establishing responsibility for violating the legal ban on using cryptocurrencies as a means of payment for goods, activities and services sold and purchased by Russian residents, whether legal entities or individuals.”
- “Prohibit the issuance and/or issuance and circulation of cryptocurrencies (including by cryptocurrency exchanges […]) on the territory of the Russian Federation and establish liability for violating this ban.”
- “Prohibit investment by financial institutions in cryptocurrencies and related financial instruments, as well as the use of Russian financial intermediaries and Russian financial infrastructure to carry out cryptocurrency transactions and stipulate liability for violating this ban.”
For now, the world is divided on what actions to take on cryptocurrencies. In fact, even Russia does not have a clear position, as its parliamentarians want to legalize the mining sector.
In short, the Central Bank of Russia does not want to lose its power over the people, as politicians see an opportunity to tax companies and citizens. Finally, it is worth remembering that today Russia is one of the largest mining centers on the planet.