Iron Hammer, Paper Hands: Russia Jumps On Crypto Ban Wagon, Moves To Outlaw Crypto Mining And Investment
On Thursday, Russia’s Central Bank launched a proposal to ban both cryptocurrency investments and mining, joining in a chorus of governments around the world cracking down on digital currencies while highlighting the various threats cryptocurrencies pose to monetary stability and private citizens
By Andrew Senior
January 20th, 2022
The Central Bank cited “speculative demand” as the driving force behind cryptos rapid growth and that the risks of the market creating a bubble are extremely high saying,
“Cryptocurrencies also have signs of a financial pyramid as increase in their prices is largely driven by demand demonstrated by new market participants.”
The Central Bank released a consultation paper outlining its position in which the Bank states its goal of seeking to ban financial institutions from investing in cryptocurrencies or even carrying out any operations involving the assets while also banning cryptocurrency exchanges and any platforms that aid in the circulation of cryptocurrencies.
Under the new proposal, The Central Bank would also ban crypto mining citing the threat it poses to Russia’s financial stability due to its
“unproductive consumption” which would disrupt Russia’s electric grid “and the implementation of Russia’s environmental agenda.”
Russia represents the world’s third-largest share in the global crypto mining market, trailing only the United States and Kazakhstan after China’s recent crypto crackdown had the desired effect of removing access to crypto markets. Russia’s Central Bank put forth estimates that Russian citizens’ transactions involving cryptocurrencies amount to over $5 billion annually and has been growing at a fast pace.
Over the coming months, The Central Bank of Russia plans to draft amendments to the Russian legislation to fully ban crypto mining and investments. Conducting transactions with cryptocurrencies is already illegal in Russia, but the country has allowed its citizens to invest and buy crypto via exchanges under a recent policy change which looks to be short-lived.
Following in China’s footsteps, Russia is also planning to issue its own digital Ruble with the aim of retaining control of its financial and monetary system.
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