The Central Bank of Russia is proposing banning cryptocurrency mining and trading in the country, in an effort to eradicate potential illegal activity related to digital tokens.
Russia’s central bank has drafted a series of new proposals that would completely ban all cryptocurrencies in the country, including their mining, issuance, any related operations such as investments by banks, and exchanging digital tokens for fiat currency, while anyone who uses them to make purchases could be held legally liable.
According to a report seen by the Financial Times, the country’s central bank attested the sharp rise in cryptocurrency prices to speculation surrounding future growth, which only leads to market bubbles. “Cryptocurrencies also have aspects of financial pyramids, because their price growth is largely supported by demand from new entrants to the market,” the report continued.
Russian nationals would still be permitted to own cryptocurrencies, provided that their holdings are abroad, but regulators would overlook their assets. “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,” explained the central bank’s head of the financial stability department Elizaveta Danilova, as cited by Interfax.
The central bank warned in its report that cryptocurrencies would accelerate already-surging inflation by “limiting the sovereignty of monetary policy,” while also helping facilitate illegal activity. Moreover, cryptocurrency mining has put a strain on the country’s electricity infrastructure, after neighbouring China banned the practice last year.
Information for this briefing was found via the Financial Times. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.