Russia mulls ban on cryptocurrency use and mining

WION Web Team
New Delhi Updated: Jan 20, 2022, 07:17 PM(IST)

A representative image of cryptocurrencies can be seen in this illustration Photograph:( Reuters )

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Russia has claimed for years that cryptocurrencies may be used to fund terrorism. Now Russian central bank has proposed ban on use and mining of cryptocurrencies on Russian soil. Russians are active cryptocurrency users with an annual transaction volume of about USD 5 billion.

Russian central bank has proposed a ban on cryptocurrency use and mining on Russian territory. The bank has cited threats posed by cryptocurrency to financial stability, citizens' wellbeing and its monetary policy sovereignty.

Russia has for years, argued against cryptocurrencies claiming that they could be used to fund terrorism or for money laundering. Russia eventually gave cryptocurrencies legal status in 2020 but banned their use as means of payment.

In a report published on Thursday, the central bank said speculative demand primarily determined cryptocurrencies' rapid growth and that they carried characteristics of a financial pyramid, warning that bubbles in the market could form, threatening financial stability and citizens.

The bank proposed preventing financial institutions from carrying out any operations with cryptocurrencies and said mechanisms should be developed to block transactions aimed at buying or selling cryptocurrencies for fiat, or traditional currencies. The proposed ban includes crypto exchanges.

Russians are active cryptocurrency users, the central bank said, with an annual transaction volume of about $5 billion.

Governments across the world are cracking down on cryptocurrencies due to worry that privately operated highly volatile digital currencies could undermine their control of financial and monetary systems.

(With inputs from agencies)

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