In Brief:
- Russia’s central bank seeks an outright ban on cryptocurrencies.
- The bank compared crypto to a Ponzi scheme and called it a tool for illegal activities.
- According to the report, crypto mining has the power to weaken the green energy agenda in Russia.
The Bank of Russia has proposed a complete ban on crypto trading and mining.
The bank published a report titled “Cryptocurrencies: Trends, risks, measures” comparing crypto to a Ponzi scheme and calls for their total prohibition in Russia.
According to the report, cryptocurrencies are extremely volatile and are used as a tool for illicit activities.
The report also cautioned that cryptocurrency could jeopardize financial sovereignty by allowing people to take funds out of the national economy.
The Russian central bank has ordered that all over-the-counter (OTC) trading desks, crypto exchanges, and peer-to-peer exchanges be prohibited.
The report also advocated for enforcing the crypto payment ban and implementing strict penalties for any violations. Russia already prohibited the use of cryptocurrency for payment, and the central bank prohibited mutual funds from investing in it in December 2021.
The bank report also proposes a complete ban on crypto mining in the country, asserting that mining activities drive demand for other crypto services such as crypto exchanges.
Crypto mining has the power to weaken the current green energy agenda while also disturbing Russia’s energy supply.
“Crypto mining creates a non-productive electricity expenditure, which undermines the energy supply of residential buildings, social infrastructure, and industrial objects, as well as the environmental agenda of the Russian Federation,” the report noted.
Following China’s crypto mining ban in May, Russia surpassed China to become the third-largest Bitcoin mining center. The latest proposal for a total ban on crypto mining in the country, if implemented, could result in yet another reformation on the global crypto mining scene.
A lot of nations are being outright brutal towards the crypto sector these days. Just recently a committee led by the deputy governor of the State Bank of Pakistan and the federal government has suggested that crypto be completely prohibited citing the risk of outflows of foreign exchange and illegal funds if it is allowed.
