In a report published on Thursday, the Central Bank of Russia called for a comprehensive ban on cryptocurrency mining and trading in the country.
The report is titled “Cryptocurrencies: Trends, Risks, Actions” to compare Ponzi scheme cryptocurrencies and calls for a complete ban on their use across Russia. The authors claim that cryptocurrencies are highly volatile by nature and are used as a tool for illegal activities. In addition, cryptocurrencies can threaten financial sovereignty and drain capital from the economy.
“The potential risks to financial stability associated with cryptocurrencies are much higher for emerging markets, including Russia.”
The Central Bank of Russia has called for a total ban on OTC desks, cryptocurrency exchanges, as well as peer-to-peer exchanges. The report also calls for a tightening of the crypto payment ban and the introduction of strict penalties for violators.
In addition, the report proposes a total ban on cryptocurrency mining in the country, claiming that mining activities create new supply, leading to demand for other crypto services such as exchanges. Cryptocurrency mining could undermine the current green energy program and also disrupt Russia’s energy supply.
Russia has become the third-largest bitcoin mining hub after China’s crypto mining ban in May.
If the recent proposal for a wholesale ban on cryptocurrency mining is implemented in the country, it could create a new order on the cryptocurrency mining world map to lead.
As Bloomberg reports, Russia’s Federal Security Service (FSB) pushed for the ban and urged central bank governor Elvira Nabiullina to take a hard line. The report claims that the FSB is concerned about an increasing amount of untraceable cryptocurrency funding of opposition parties and media.
The report is open for public discussion, with a deadline for comments and suggestions from interested parties on March 1, 2022.
The Central Bank of Russia has been skeptical about cryptocurrencies for quite some time. However, what could be taken as a sign of President Vladimir Putin’s interest and understanding of cryptocurrencies leads some to believe that the Russian government may choose to regulate the decentralized industry more heavily.
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