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Russia’s central bank has advised the government to completely ban cryptocurrencies and all their affiliated activities within the nation’s borders.
This shocking development comes in a report that the Bank of Russia (BOR) submitted to the government on Thursday.
The report titled Cryptocurrencies: trends, risks, measures was featured in a webinar press conference that BOR’s Elizaveta Danilova hosted in the early hours of Thursday.
The report features strong anti-crypto sentiments citing the volatility of virtual currencies and digital assets class and its frequent utility by bad actors from fraudulent and non-compliant activities. BOR said in the report that it fears that the economic alternative that cryptocurrencies offer Russians might snowball into a domino effect that can result in the crash of Russia’s fiat currency, the ruble, due to mass conversion of fiat to crypto that will ensue when Russians begin to acquire virtual currencies. BOR’s report further cited the difficulty of surveilling and regulating the asset class and the protection of Russians interest in the global financial community.
Russian being the world’s third-largest crypto mining industrial location inspired BOR’s report dedicated section that served as a warning against and argue for the crackdown on all crypto mining complexes in the country, with issuance and circulation banned within Russia’s borders. Non-mining crypto firms were not excluded from BOR’s proposed purge as the report also features warnings to outrightly close down crypto exchanges in the country like OTC desks and Peer 2 Peer platforms that facilitate the exchange of cryptocurrencies in the country.
BOR’s proposed rule book also ensures that financial institutions’ investment power in virtual currencies is completely rendered invalid, effectively isolating Russia from the majority of the crypto industry.
BOR has doubled down on its previous sentiments and anti-crypto moves, suggesting the punishment of offenders of its previous ban on mutual funds investments in crypto. The bank believes that Russia’s CBDC can effectively substitute for cryptocurrencies utility in the country, as it features the advantage of keeping Russia’s fiat currency in circulation within the country’s economy.
The Community’s Reaction
Interestingly, crypto miners in Russia are unmoved by this development with mist stating that the report is just that, a report. The report is just a repeat of BOR’s strong sentiments about the crypto industry and any policy that is to be levied will seek to require inputs from numerous stakeholders in the country, not only the Bank of Russia’s.
Director Roman Zabuga of BitRiver mining industries believes that the complete isolation of the crypto industry via a ban is bogus and that the probability of such occurrence is virtually zero.
Compass Mining CEO, Whit Gibbs went on to back up roaming sentiments that the BOR’s report is just a report and nothing more when he shared his belief in a statement that read, the BOR is only reenacting their one-sided stage play and reaffirming their position concerning the assets class before the formation of the working group next month.
The Irony Of Russia’s CBDC
Despite BOR’s bitter anti-crypto sentiments, Russian is still on schedule to roll out its Central Bank Digital Currency, the digital Ruble, sometime this year. BOR’s proposed crypto ban seems familiar right?, that is because it seems to mirror China’s move of virtual currencies crackdown only to roll out trial versions of its CBDC and digital yuan.
The BOR believes that the adoption of the digital ruble will completely substitute Russians’ need for cryptocurrencies with its features that field fast and affordable digital payment options.
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