Russia’s central bank calls for a blanket ban on cryptocurrency trading and mining in Russia, citing them as “volatile and widely used in illegal activities”, and a threat to the country’s financial stability, citizens’ wellbeing and the sovereignty of its monetary policy.
The report titled “Cryptocurrencies: trends, risks, measures” observed that Cryptocurrencies “offer an outlet for people to take their money out of the national economy, thereby undermining it and making the regulator’s job of maintaining optimal monetary policies harder.”
This follows the Central Bank of Russia’s plan to collect information from commercial banks with regards to certain private money transfers and details of clients who traded in cryptocurrency both in the country and abroad.
Russia has already outlawed accepting cryptocurrency as a means of payment in exchange for goods or services. Now, the latest report focuses on additional penalties for those flouting this norm. Russia had given legal status to cryptocurrency in 2020.
Satiating the citizens’ need for quick, efficient and cheap payment options, Russian Central Bank is also in the works to introduce its own digital currency (CBDC) or the digital ruble
While the report already stated the need to forbid any crypto-circulation in the country by banning online cryptocurrency exchanges, over-the-counter trading desks and peer-to-peer platforms, a major question it raised was on clipping its issuance.
Russia contemplates banning crypto mining altogether.
While the report calls an outright ban to be the “best” and “optimal” solution for Russia, it also highlighted that 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.”