Russia’s Central Bank Proposes Ban on the Use and Mining of Crypto

On Thursday, January 20, the Bank of Russia published a report that proposes a ban on the use and mining of cryptocurrencies within Russian territory. In the report, the Central Bank of the Russian Federation stated that cryptocurrencies pose threats to financial stability, citizens’ wellbeing and its monetary policy sovereignty. Furthermore, the regulator mentioned that the rapid growth of crypto coins was determined majorly by speculative demand and could lead to a market bubble that threatens citizens’ welfare and financial stability. Additionally, the regulator stated that crypto coins carry characteristics of a financial pyramid.

Therefore, the Russian Central Bank has proposed the prevention of financial institutions from conducting any operations involving crypto transactions. Moreover, the central bank identified that a mechanism should be created to block transactions aimed at selling or purchasing cryptocurrencies for fiat or traditional currencies. The regulator’s proposed ban includes cryptocurrency exchanges. In the report, the central bank described Russians as active crypto users conducting transactions with a volume of around $5 billion per year. The authority disclosed that Russia is the third largest cryptocurrency mining country in the world. According to the new report, the “potential financial stability risks associated with cryptocurrencies are much higher for emerging markets, including in Russia.”