Russia wants to ban cryptocurrency trading and mining

What just happened? Russia has proposed, following China, to drastically abandon cryptocurrencies. The country’s central bank has proposed banning the use and mining of cryptocurrencies on its territory due to concerns that this could harm Russia’s financial system and environment.

Elizaveta Danilova, Director of the Financial Stability Department of the Bank of Russia, presented the report “Cryptocurrencies: Trends, Risks, Measures” report during an online press conference.

The report states that the cryptocurrency has a lot in common with the pyramid scheme and is often used in criminal activities. It also undermines the sovereignty of monetary policy by offering citizens a way to get their money out of the national economy.

The report goes on to say that cryptocurrency mining harms Russia’s green agenda, poses a risk to its energy supply, and could exacerbate the adverse effects of cryptocurrency proliferation.

“The potential financial stability risks associated with cryptocurrencies are much higher for emerging markets, including in Russia,” the central bank said.

In Russia, payments using cryptocurrency are already prohibited, and mutual funds are prohibited from investing in it. However, the country is still the third largest cryptocurrency mining country in the world after the US and Kazakhstan.

While the bank is not proposing to make crypto ownership illegal, it wants harsher penalties for those who break the current rules and is asking for new laws to ban the use of cryptocurrencies. As for mining, the report says that the “optimal solution” would be to ban it altogether in Russia.

It should also be noted that people with offshore exchange accounts will still be able to trade cryptocurrencies and any ban must first be enacted by law.

The price of bitcoin has dropped from $43,200 to just under $39,000 in the last 24 hours.

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