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Bank of Russia proposes a complete ban on Bitcoin mining and crypto transactions

Bank of Russia's Financial Stability Department head Elizaveta Danilova (image: RCB webcast)
Bank of Russia's Financial Stability Department head Elizaveta Danilova (image: RCB webcast)
The Russian Central Bank has come up with its own set of proposals to add to the Parliament's working group on crypto regulation that was formed back in December. The head of Bank of Russia's Financial Stability Department presented a report that essentially suggests a full ban on crypto payments, mining, and transactions in the country.

Russian Central Bank representatives took part in the Russian Parliament's digital assets regulation working group discussions that were held in December, and now propose a blanket ban on cryptocurrency trading or Bitcoin mining. The crypto ban proposal was tucked in a report called "Cryptocurrencies: trends, risks, and measures" that the head of Bank of Russia's Financial Stability Department, Elizaveta Danilova, presented at a press conference webcast. Citing the innate volatility of cryptocurrencies and their propensity for enabling fraudulent transactions, the report says that crypto presents a danger to Russia's financial stability by evading standard regulatory principles and enlarging the share of hidden economic activity.

The Russian Central Bank's report thus suggests that all unsanctioned crypto-related activities be banned, including new coin issuance, trading desk and exchanges, and all connected blockchain platforms. The document informs that new digital asset types are often predicated on the concept of a financial pyramid scheme and hence are a danger to Russian citizen's wellbeing. Apart from individuals, Russian financial investment firms or organizations should be prohibited from participating in speculative crypto transactions, advises the Russian Central Bank, and the current ban on using crypto for any types of payments widened and enforced better.

All in all, it seems that if the Bank of Russia has its way, from now on only its dedicated department will have the right to regulate and manage cryptocurrency payments or transactions in the country. This could have profound implications for the Bitcoin miners there whose hashrate is now one the world's largest given the crypto mining turmoil in neighboring Kazakhstan. Alternatively, the crypto ban proposal could be the Bank's starting point for negotiation in the joint working group on digital asset regulation formed by the Parliament's Financial Committee, Central Bank, and Ministry of Finance representatives.

After all, the Russians are pretty big proponents of crypto as a means to escape the dollar's hegemony as the world's reserve currency, and participate in some US$5 billion worth of crypto transactions annually. Russian President Vladimir Putin went on record last year commenting that Bitcoin and other cryptocurrencies hold a promise for the future but are still too volatile to be used as a regular means of payment for now, and Russian oil won't be priced in crypto anytime soon.

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RCB (PDF) via Coindesk

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> Expert Reviews and News on Laptops, Smartphones and Tech Innovations > News > News Archive > Newsarchive 2022 01 > Bank of Russia proposes a complete ban on Bitcoin mining and crypto transactions
Daniel Zlatev, 2022-01-20 (Update: 2022-01-20)