Bank of Russia Proposes Wide Ban on Cryptocurrency Use, Trade, Mining-CryptocurrencyMohoagd

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The Bank of Russia has proposed a blanket ban on cryptocurrencies.


The Central Bank of Russia, in keeping with its strong stance on decentralized digital money, is now pressing for a broad ban on crypto-related operations like as issuance, trade, and mining. The proposed limits are based on dangers to financial stability and citizens' well-being, according to the regulator's consultation paper.


Russia’s Central Bank Seeks Public Opinion on Restrictive Crypto Policy


In a paper titled "Cryptocurrencies: Trends, Risks, and Measures," Russia's central bank advocates for a ban on a variety of crypto activities. The document was released on Thursday, and through March 1st, the regulator is accepting comments and ideas on its contents. The Central Bank of Russia (CBR) notes in the report the worldwide crypto market's rapid expansion over the last year, as well as Russians' annual $5 billion in crypto transactions.


At the same time, the bank emphasizes that the rise in value is mostly driven by speculative demand, which is developing a bubble, and that cryptocurrencies have financial pyramid characteristics. It claims that their spread poses a threat to Russia's financial system's stability. monetarist policies


To combat these dangers and the potential of criminal conduct, the Bank of Russia plans to work with the Russian government and parliament on a number of suggested legal modifications in the coming months. The introduction of legal liability for violations of the prohibition on the use of crypto as a means of payment for goods and services is one of them.


Cryptocurrencies like bitcoin and stablecoins have been referred to by the authorities as "monetary surrogates" that are illegal under Russian legislation. It now seeks to outlaw their issuance and distribution in Russia, including on digital asset exchanges and peer-to-peer networks.


The central bank has also spoken out against crypto investments, stating that financial institutions will be prohibited from investing in cryptocurrencies and crypto-based financial instruments. It emphasizes that cryptocurrency operations should not be facilitated using Russian financial infrastructure or middlemen.


Mining, according to the Bank of Russia, cannot be overlooked because it increases public and private sector participation in the cryptocurrency market. The agency believes that the activity's current scope and spread pose serious threats to the environment and energy supplies. According to the CBR, prohibition is the best approach.


Energy-rich Russia has become a mining hotspot as China cracks down on the industry. For many houses with subsidized energy, minting digital currencies is not only a profitable business, but also a source of supplemental income. Authorities in some areas have expressed concern about increased energy usage, which is putting a strain on power networks.


The Bank of Russia intends to tighten its oversight of cryptocurrency transactions. As part of these measures, it plans to collaborate more closely with financial regulators in other countries, particularly to collect information on transactions involving Russian citizens. The bank's plan, however, does not include any limits on cryptocurrency ownership outside of Russia, as noted by Elizaveta Danilova, the head of the central bank's Financial Stability Department.


The Central Bank of Russia indicated last month that cryptocurrencies had no place in the country's financial industry, ahead of providing its views on crypto laws in this study. Other Russian government organizations, according to media accounts, do not share its conservative stance. The State Duma, Russia's lower house of parliament, established a working group.

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