The central bank of Russia has proposed that cryptocurrency trading, mining and usage be made illegal, with a senior official saying cryptocurrencies are volatile and are commonly employed in criminal operations such as fraud and money laundering.
The ban on cryptocurrencies comes from a paper published Thursday, January 20, presented on an online news conference with t
The head of the Bank of Russia’s Financial Stability Department, Elizaveta Danilova, presented a paper “Cryptocurrencies: Trends, Risks, Measures,” during an online new conference, CoinDesk reported.
According to the paper, by providing an avenue for individuals to withdraw their money from the national economy, they run the risk of weakening it and making the regulator’s work of maintaining optimum monetary policies more difficult.
As a result, the bank considers that Russia needs new legislation and regulations that essentially prohibit any crypto-related businesses in the nation. Specifically, the issue of cryptocurrencies, as well as the organisation of their circulation in Russia, must be banned, including exchanges, over-the-counter trading desks, and peer-to-peer platforms.
The report emphasises that existing restrictions on the use of cryptocurrency for payments should be strengthened, and penalties should be instituted for Russian people and enterprises that purchase or sell products, services, or labour using cryptocurrency.
In order to prevent Russian institutional investors from making cryptocurrency investments, no Russian financial institutions or infrastructure should be utilised for crypto transactions, Danilova argued.
Mutual funds have previously been prohibited from investing in cryptocurrencies by the Bank of Russia. It is now proposing the introduction of a penalty for those who violate the restriction.
In December, the financial news platform Finbold reported that the Deputy Chairman of the Central Bank, Vladimir Chistyukhin, hinted that privately operated cryptocurrencies might soon be phased out of the country’s financial systems.
“I think we will publish a report on cryptocurrencies in the near future. This report will contain our approaches to the place for cryptocurrency we see in the Russian financial market. I give a hint – we do not see a place for cryptocurrency in the Russian financial market,” Chistyukhin concluded.
Monitor transactions abroad
Furthermore, Russia’s central bank intends to monitor cryptocurrency transactions carried out by Russian citizens and to collaborate with countries where cryptocurrency exchanges are established in order to get information on crypto transactions carried out by Russian citizens.
The regulator believes that improving the present banking infrastructure and introducing the digital rouble, a central bank digital currency (CBDC) now under development by the Bank of Russia, would in the future meet the need of Russians for rapid and inexpensive digital payment choices, thereby providing them with the benefits of cryptocurrency without the risks.