The Bank of Russia has called for a ban on all cryptocurrency-related activity, including trading, mining and usage.
The stance comes off the back of a report, “Cryptocurrencies: trends, risks, measures”, presented on January 20, 2022, at an online press conference.
Elizaveta Danilova, the director of the Bank of Russia’s Financial Stability Department, drew attention to the report’s claim that cryptocurrencies are volatile and widely used for illegal activity.
By providing an outlet for citizens to remove their money from Russia’s economy, the central bank worries it is being undermined and maintaining effective monetary policy will grow harder, the report says.
As a response, the bank wants to effectively ban all crypto-related activities through new laws and regulations.
The report calls for bans on cryptocurrency issuance and circulation in particular, noting that the ban should apply to exchanges, trading desks, and peer-to-peer platforms.
A bill signed by Russian President Vladimir Putin in July 2020 already bans the use of crypto for payments, but the report suggests introducing a punishment for buying or selling goods and services with any digital coin.
The Bank of Russia also wants to bring in punishments for mutual funds that invest in cryptocurrencies, a practice that was banned in December 2021.
In spite of this stance, Russia’s largest commercial bank Sberbank recently announced the country’s first blockchain exchange-traded fund (ETF).
Elvira Nabiullina, the head of the central bank, said in October 2021 she will not allow for a Bitcoin ETF to be traded in Russia.
Cryptocurrency mining, which has boomed in Russia in recent years, also came under fire from the report.
Mining, and the demand for other crypto services it stimulates, “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 said.
Looking to revamp your digital transformation strategy? Learn more about the in-person Digital Transformation Week North America taking place in Santa Clara, CA on 11-12 May and discover key strategies for making your digital efforts a success.
Explore other upcoming enterprise technology events and webinars powered by TechForge here.