In Russia, the central bank has asked for a complete ban on cryptocurrency use throughout the country. The planned ban on cryptocurrency trade, mining, and usage in the country would be effective immediately. Once in force, the law will only permit the possession of cryptocurrencies in Russia, and will not permit any other cryptocurrency-related activity.
Russia ban on cryptocurrency
In a new consultation paper, the Bank of Russia has revealed its thoughts on the plan. It is discussed in detail in the article what concerns are presented to the financial stability and well-being of the country’s population by the volatile nature of cryptocurrencies. The study also draws attention to the widespread usage of cryptocurrencies in illicit operations, which it describes in detail.
According to research published by the Russian central bank, the fast expansion of cryptocurrencies is mostly attributable to speculative demand. This is leading to the possibility of a market bubble, which has features similar to those of a financial pyramid. If and when they lose their value, it might have a significant negative impact on the country’s investors and the economy.
Also Read: Types of Crypto Mining You Should Know
Limitations on Cryptocurrency
Russia had legalised cryptocurrencies as far back as 2020, yet it quickly outlawed their usage for financial transactions. With the latest plan from the Bank of Russia, the bank hopes to impose even more limitations on cryptocurrency in the nation. It is anticipated that a significant impact will be detected on the cryptocurrency exchanges that operate in Russia.
The report also discusses the issue of bitcoin mining, which is a source of concern. Because cryptocurrency mining necessitates the use of huge computers with significant computing capacity, the demand for energy resulting from this activity places a strain on a region’s energy system. Many countries are now tackling this issue, and it appears that Russia’s central bank has taken a position on the matter.
Russia is the world’s third-largest area for bitcoin mining, behind China and the United States. Due to an excess load on Russia’s energy resources as a result of the corresponding energy needs, the Bank of Russia has suggested that “the restriction of cryptocurrency mining in Russia might be the best answer” to alleviate the situation in this regard.
Despite all of these steps, the nation has not openly outlawed cryptocurrency, in contrast to China, which has done so. Russia does not envision a ban on cryptocurrency ownership, despite the fact that it takes note of other nations’ positions on the subject in the consultation document. According to Elizaveta Danilova, chief of the central bank’s financial stability section, the situation is the same.
Danilova is quoted as stating the following in a Reuters report: “Currently, no plans exist to prohibit cryptocurrencies in the same way that China has done so in the past. We believe that the strategy we have presented will be sufficient.”