The Central Bank of Russia is advocating a ban on all sorts of crypto activities in a report titled “Cryptocurrencies: Trends, Risks, Measures.” The document was published this week, and the regulator awaits comments and suggestions on its contents until March 1. In the paper, the Central Bank of Russia (CBR) acknowledges the rapid growth of the global crypto market in the past year and the annual $5 billion in crypto transactions made by Russians.
Bank of Russia said cryptocurrencies have the characteristics of a financial pyramid.
The central bank noted that the growth in value of cryptocurrencies is determined mainly by speculative demand, which is forming a bubble. Cryptocurrencies have the characteristics of a financial pyramid. Their spread, it says, poses threats to the stability of Russia’s financial system, monetary policy sovereignty, and the wellbeing of its citizens. To reduce these threats and the risk of illegal activity, the Bank of Russia intends to collaborate with the Russian government and parliament on a number of proposed legal amendments in the coming months.
The central bank wants to ban the issuance and circulation of cryptocurrencies entirely.
The monetary authority of Russia has often referred to cryptocurrencies like bitcoin and stablecoins as “monetary surrogates” that are prohibited under current Russian law. It now wants to ban their issuance and circulation in the Russian economy, including crypto exchanges and peer-to-peer platforms. The central bank has also opposed crypto investments and intends to prohibit financial organizations from investing in cryptocurrencies and crypto-based financial instruments. The central bank insists that the Russian financial infrastructure and intermediaries should not be used to facilitate cryptocurrency operations. The regulator believes the current scale and further spread of crypto mining could bring significant environmental and energy supply risks.