Russia’s Central Bank Proposes Ban on Crypto Mining and Trading

Jafrin  |  Jan 21, 2022
Russia’s Central Bank Proposes Ban on Crypto Mining and Trading
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Russia’s central bank proposed a blanket ban on crypto-related activities such as issuance, exchange, and mining, citing threats related to monetary stability. In its consultation paper titled, Cryptocurrencies: trends, risks, measures, presented during an online press conference, the bank said it seeks to ban financial institutions from investing in or carrying out any operations related to cryptocurrencies.
“The breakneck growth and market value of cryptocurrency is defined primarily by speculative demand for future growth, which creates bubbles. Cryptocurrencies also have aspects of financial pyramids, because their price growth is largely supported by demand from new entrants to the market,” the central bank stated in a 36-page report published on Thursday.
The Central Bank also seeks to ban crypto exchanges or any other platforms that facilitate the circulation of cryptocurrencies. Additional proposals include banning crypto mining, citing the threat to Russia’s financial stability through its “unproductive consumption” of electric power “and the implementation of Russia’s environmental agenda.” Russia is the third biggest global crypto miner just behind the United States and Kazakhstan after China cracked down on bitcoin mining last year. BitRiver, Minespot, and BitCluster are among the biggest crypto mining companies in the country. As of yet, conducting crypto transactions is illegal in the country, but investing and buying crypto through exchanges was permitted under a recent change. Regarding this, Elizaveta Danilova, head of the central bank’s financial stability department, said that Russians would still be allowed to own cryptocurrencies abroad but regulators would track their holdings.
“We consider it very important to ban using Russian financial infrastructure to obtain cryptocurrency. We think this will help remove a significant part of the risks and ensure that cryptocurrency won’t be so popular,” she added.
The Central Bank is also planning to issue its own central bank digital currency as it seeks to retain control of its financial and monetary system.
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