Although Russia has established a series of restrictions against bitcoin (BTC) and cryptocurrencies in the past, the Central Bank of that country gives a strong sign of its rejection of the entire industry, through a report presented today, January 20.
“Cryptocurrencies: Trends, Risks, Measures” is the name of the document presented by the head of the Financial Stability Department of the Bank of Russia, Elizaveta Danilova.
The financial institution displays a series of considerations for which they consider that bitcoin and cryptocurrencies “pose significant threats to the well-being of Russian citizens and the stability of the financial system,” says the text.
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Among the “threats” represented by cryptocurrencies, in the opinion of the financial institution, is their volatility and «its common use in criminal operations such as fraud and money laundering (drug trafficking, financing of terrorism, etc.)».
They assure that cryptocurrencies are a “financial bubble”, because the rapid change in the price of crypto assets in the market is mainly determined by “speculative demand”. They also maintain that the cryptocurrencies have the characteristics of a financial pyramid and that limit the sovereignty of monetary policy.
Proposal to end the “threat” posed by bitcoin and cryptocurrencies
Faced with a scenario in which the cryptocurrency industry is seen as a criminal sector, the financial regulator recommends in the report prohibit the use of bitcoin and other cryptocurrencies as a means of payment through a series of laws.
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Likewise, it suggests ending the issuance of cryptocurrencies by prohibiting mining, and that they stop circulating on exchanges and P2P platforms.
In this sense, it considers it necessary to prohibit financial organizations, financial instruments, as well as the use of Russian financial intermediaries and the financial infrastructure of that country to carry out transactions with cryptocurrencies.
On this subject, CriptoNoticias recently reported that Russia is advancing legislation to censor investment funds based on bitcoin and other cryptocurrencies.
They also intend to eradicate Bitcoin mining
“Russia believes that the current scale of issuance and the increased spread of cryptocurrency mining carries significant risks to the economy and finances,” the Russian Central Bank report said.
They consider that Bitcoin mining creates an “unproductive consumption of electricity”, which – according to the Central Bank – puts the energy supply for homes, businesses and state infrastructure in “danger”.
It should be remembered that Russia is among the leaders in terms of global mining capacity, something that was consolidated in recent months with the migratory wave of Bitcoin miners from China, who, looking for a place to operate, settled in Russian territory, as reported by CriptoNoticias.
In a similar line of action, last September China described activities and businesses related to bitcoin and cryptocurrencies as illegal, which produced an exodus of companies from the industry.
This not very encouraging scenario that began in China and is now showing in Russia, it seems that it could have a happy ending on the other side of the world, specifically in Latin America.
One of those countries is El Salvador. There, bitcoin is legal tender and is being mined with a network using geothermal energy from volcanoes.
Also in countries like Paraguay, Argentina or Costa Rica there are conditions for the industry, especially for the energy supply.
In Paraguay seeks to establish a clear regulatory framework for Bitcoin and other cryptocurrencies, but with a special emphasis on digital mining. In the case of Costa Rica, there is an excess supply of clean, cheap energy with a stable internet connection, something coveted by international mining companies.
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