According to a report published, Russia’s central bank advises making crypto trading, mining, and usage illegal due to risks.
During an online press conference with Elizaveta Danilova, director of the Bank of Russia’s Financial Stability Department, the report “Cryptocurrencies: Trends, Risks, and Measures” was presented.
Cryptocurrencies, according to the report, are volatile and commonly employed in criminal activities such as fraud. The research claims that by providing a way for consumers to withdraw their money from the national economy, they risk undermining it and making the regulator’s job of maintaining optimal monetary policies more difficult.
As a result, the bank believes that Russia need new legislation and regulations that effectively prohibit any crypto-related businesses in the nation. The issuance of cryptocurrency and the organization of its circulation in Russia, in particular, must be prohibited. Exchanges, over-the-counter trading desks, and peer-to-peer platforms should all be prohibited.
The report recommends that the existing ban on using cryptocurrency for payments be strengthened, and that penalties be imposed on Russian individuals and enterprises who acquire or sell products, services, or labor.
No Russian financial institutions or infrastructure should be used for cryptocurrency transactions, and no Russian institutional investors should be allowed to invest in crypto assets. Mutual funds have previously been forbidden from investing in cryptocurrencies by the Bank of Russia. It is now being proposed that a penalty be imposed for violating the ban.
Cryptocurrency mining, which has grown in popularity in Russia in recent years and even received some clearance from the country’s parliament last year, was also criticized.
Mining generates new cryptocurrency supply, which boosts demand for other crypto services like exchanges. It also “creates a non-productive electricity expenditure, undermining the energy supply of residential buildings, social infrastructure, and industrial objects, as well as the Russian Federation’s environmental agenda,” according to the report.
According to the research, the “ideal solution” would be to prohibit crypto mining in Russia.
According to the report, the central bank intends to monitor cryptocurrency transactions by Russian citizens and coordinate with countries where cryptocurrency exchanges are established in order to obtain information on transactions by Russian users.
The regulator believes that improving current banking infrastructure and introducing the digital ruble, a central bank digital currency (CBDC) currently under development by the Bank of Russia, will meet Russians’ demand for fast and low-cost digital payment options in the future, effectively giving them crypto benefits without crypto.
Coindesk was used as a source.