Bank of Russia v. Crypto: Promotes a ban on mining in the country

The Central Bank of Russia has proposed banning the mining and trading of cryptocurrencies in the country’s territories, citing threats to Russia’s financial stability and monetary policy as part of the reasons for the move.

The central bank’s move is another step in a series of global actions that governments around the world, from Asian countries to the US, are taking against cryptocurrencies, all for fear of undermining and overseeing financial stability.

Russia is not an ardent supporter of crypto and senior officials in its government have argued over the years that such currencies could be used for money laundering or economic terrorism. Recall that in 2020 cryptocurrencies were given a legal definition in Russia, but their use as a means of payment in the country was banned.

In a report released last Thursday, the Central Bank of Russia noted that the value of crypto is defined primarily through speculative demand and that the rapid growth of these currencies has the characteristics of an economic pyramid. The bank warned of bubbles in the crypto market that would pose a threat to the security of Russian citizens and the economic security of the country. The bank proposed preventing economic institutions (banks) from conducting operations with crypto and noted that the state should develop a mechanism that would block crypto or fiat money transfers. According to the central bank, the share of transfers of active crypto users in Russia is about $ 5 billion a year.

Russia is the third largest country in control of the bitcoin mining market, with the United States and neighboring Kazakhstan standing above it.

The central bank noted in its report that crypto mining will create energy consumption problems because mining bitcoin and similar currencies uses powerful computers that consume very large amounts of electricity and sometimes even fossil fuels, the report said. “The best solution to the problem is to ban crypto mining in Russia,” the report said.

By Editor

Leave a Reply