Cryptocurrency Ban: Russia’s Central Bank proposes a complete ban on cryptocurrencies
It is believed that the Russian central bank is planning on cracking down on the cryptocurrency ban. If implemented, it could disrupt the rapidly growing digital money industry because Russia is among the most prominent crypto mining nations around the globe.
Russian authorities have for many years been critical of the cryptocurrency ban due to fears that they could be used to carry out illicit activities and have demanded regulation.
Authorities gave cryptocurrencies legal status in 2020; however, their use in payment was not authorised.
The Russian bank called Thursday to increase the prohibition on cryptocurrency transactions, ban cryptocurrency mining and tighten regulations on trading in virtual currency. “The use of cryptocurrency poses grave threats to the wellbeing of Russian citizens as well as to security of financial systems,” the report released by Russia’s central bank said.
The report further stated that the rapid expansion of cryptocurrency is due to “speculative demand” that leads to the creation of”bubbles”.
The report stated that cryptos are similar to financial “pyramid schemes” because their value grows with new players in the market.
It estimated the annual volume of transactions of Russian citizens to be $5 billion (roughly about Rs. 37,270 crores).
Bloomberg previously reported on sources declaring that Russia’s security agency, called the FSB, was lobbying the head of the central bank, Elvira Nabiulina, in favour of a ban.
The FSB raised concerns about Russians frequently using difficult-to-trace transactions to aid “undesirable organisations”, such as opposition groups.
Why are countries banning Crypto?
Some governments that have banned crypto have said that cryptocurrencies are being used to funnel money to illegal sources and argued that the rise of crypto could destabilise their financial systems.
Why is Russia banning Crypto?
Russia’s central bank proposed banning the mining, creation, and use of cryptocurrencies, in a report released Thursday. The central bank said the proliferation of cryptocurrencies pose a danger to Russia’s financial system and the stability of the Russian ruble.