To Ban Or Not To Ban? Russia Concerned About Growing Crypto Transanctions

The Russian central bank wants to ban investments in cryptocurrencies in Russia, citing the growing number of crypto transactions as a threat to financial stability.

Russia Mulls Over Crypto Ban

Russia’s central bank is attempting to outlaw cryptocurrency investments, escalating the country’s long-standing distrust of Bitcoin and other digital assets. Future transactions would be prohibited, but present holders would not be forced to sell their holdings.

Cryptocurrencies, according to Russian authorities, can be used for money laundering and terrorism financing. According to Reuters, the bank’s current stance on cryptocurrency is a “complete rejection.”

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Although it is still illegal in Russia to undertake cryptocurrency transactions, a new amendment has made it permissible to invest in and buy cryptocurrencies through exchanges.

Any such limitations might stifle Russia’s current retail investment boom, which has seen 15 million Russians create brokerage accounts in the last few years, according to Central Bank estimates.

The regulator has already acted quickly to restrict access to other types of risky investment products, anticipating that Russia’s low financial literacy and strong broker marketing might lead to consumers being lured into high-risk investments. If they want to invest in items like options and derivatives, retail investors must must complete a series of examinations.

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Elvira Nabiullina, the governor of the Central Bank of Russia, increased the fear, uncertainty, and doubt (FUD) around the country’s current state of crypto regulation in a Friday press conference. When asked about the rise of digital assets, Nabiullina said the following, according to finmarket.ru, a local news outlet:

“You know that our attitude towards cryptocurrencies is of, to put it mildly, skepticism. Related to this are the significant risks for retail investors and the substantial volatility for this type of asset. In addition, cryptocurrencies are opaque in that they are frequently used for illegal operations or criminal nature. Therefore, we cannot welcome investments in them. We seek to prevent the Russian financial infrastructure from using crypto transactions. This is quite doable.”

Related article | Russia Plans To Impound Unlawfully Acquired Cryptocurrencies

Illegal Miners To Be Jailed

Andrey Lugovoy, a member of parliament’s lower house, the State Duma, has threatened miners with jail if they connect their equipment to the power grid without permission.

Lugovoy disclosed in November that his nationalist party, the Liberal Democratic Party of Russia, is preparing to introduce a draft law to govern crypto mining. According to the congressman, the approval of the legislation will help Russian nationals, the state, and entrepreneurs who wish to legitimately engage in business.

He has now added, in an interview with the Russian online news outlet Lenta.ru, that mining regulation makes sense. Aside from charging mining businesses varying power prices, the deputy believes their profits should be taxed after deducting the cost of the energy consumed and other expenses such as labor. Lugovoy accused miners of avoiding paying taxes by using subsidized, low-cost electricity.