RIO DE JANEIRO, BRAZIL – Russia’s central bank intends to prohibit the use and mining of cryptocurrencies, arguing that they could be used to threaten its monetary policy sovereignty and the country’s financial stability.
The proposal, which is in line with the CBR’s hard line stance on digital assets, comes after the regulator sought to bar investment in cryptocurrencies in the country. However, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses. If approved, it wouldn’t penalize old purchases of cryptocurrencies.
In a report titled “Cryptocurrencies: Trends, risks, measures”, the central bank said cryptocurrencies carry the hallmarks of a Ponzi scheme, warning of potential bubbles in the market.
Russia’s Apex bank also voiced concerns about risks to financial stability due to the high volatile nature of crypto transactions. According to its estimates, the annual volume of crypto transactions in the country is around US$5 billion.
“The Bank of Russia has hinted at the possibility of a sweeping ban on crypto many times before so this recent development is hardly surprising. Importantly, the ban will also outlaw any crypto mining activities. As this would negatively affect Bitcoin’s hash rate, some investors may be wondering whether the ban, when enforced, could result in more selling pressure on the price of this…
