On January 20, 2022, the Central Bank of the Russian Federation (CBR) released a report to urge a complete crypto ban inside Russia. Of course, this isn’t the first time that the financial institution tries to go against cryptocurrencies in general. Previously, they’ve cited possible risks for retail investors and the national financial sovereignty as well.
This time isn’t much different. In the report titled “CryptocurrencyA digital currency running on a blockchain and built with cryptography. Contrary to central-bank issued currency, cryptocurrency issuance rules are... Risks and Possible Regulatory Measures”, the bank claims that the use of cryptocurrencies may imply risks for the Russian citizens and financial stability. Besides, they consider that cryptocurrencies and stablecoins are being used in illegal activities.
Currently, Russian crypto users have to face strict limitations. They can’t pay for goods and services with crypto, and any undeclared holding over $1,300 is finable to even 40%. Additionally, government officials aren’t allowed to own cryptocurrencies, and they seize any illegal cryptocurrency.
Those measures aren’t enough for the central bank, apparently. They want to ban any transactionA cryptocurrency transaction is an entry on the blockchain ledger, noting sender, receiver and number of coins transacted. with cryptocurrencies, especially the ones against local currency —which could include a crackdown on crypto exchanges. Indeed, since previous months, the CBR has been working with other national banks to slow down cryptocurrency payments.
Cryptocurrency mining isn’t welcome by the bank either. According to them, crypto mining poses a risk for the national energy system. So, the best would be a full ban against such activity. The only thing they’d permit would be the holding of cryptocurrencies by their citizens in foreign jurisdictions. On the contrary, inside Russia, they’d track crypto transactions and apply legal measures to the traders.
Luckily, te crypto ban is barely a proposal right now in Russia. Take it or not depends on the State Duma and the Federation Council.
Crypto in Russia
Despite the legal hostilities, Russia is one of the countries with more cryptocurrency users worldwide. A recent survey even found out that around 77% of Russian investors prefer crypto to gold and Forex. Additionally, since China’s crypto crackdown in 2021, a huge percentage of BitcoinBitcoin is the first decentralized digital currency. It was created in 2009, by an anonymous founder or group of founders... More miners from there flew away to Russia, which is a near alternative.
Subsequently, by August 2021 [CBECI], this country became the third-largest Bitcoin minerMiners secure some blockchain networks by ordering crypto transactions into blocks and verifying the blocks of other miners. For this... worldwide. And that worries the crypto users now because a new huge migration of miners could hit the speed of the network and the BTCAn abbreviation for Bitcoin. price. Just like it happened with China —temporarily, though.
Some Russian experts and national members of the industry have spoken out against such a move. In summary, they believe that a full crypto ban will only delay Russia technologically, scare away foreign investors, and even make young talents and entrepreneurs seek to migrate as well. The consequences would be economical eventually, while the crypto industry would hardly disappear from the country.
In the meantime, at least, the CBR is open to comments and suggestions for this proposal until March 1, 2022. And there’s no doubt that every crypto player inside the country will suggest a lot of changes.
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