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Central Bank Russia wants to ban all cryptocurrency operations in the country, one of the world’s largest digital mining sites.
Under the pretext of planning, Russia will ban the issuance of all cryptocurrency transactions, ban banks from investing in cryptocurrencies, block cryptocurrency exchanges, and impose restrictions on the use of cryptocurrencies.
In a report 36 page published Thursday, the central bank said: “The breakneck growth and market price cryptocurrency is defined primarily by the hypothetical demand for future growth, which creates bubbles.”
“Cryptocurrencies also play a part in the economic pyramids, because their price growth is largely influenced by demand from new entrants to the market,” it added.
The idea comes after the EU chief of staff told the Financial Times bloc should be banned the mining method used to make bitcoin the newest, energy-efficient process called “proof of performance”.
Elizaveta Danilova, head of the central department of the central financial bank, said that Russian is still allowed to become cryptocurrencies abroad but warned that the authorities will look into what they did.
“We feel it is very important to prevent the use of Russian currency for cryptocurrencies. We think this will help eliminate a major risk factor and ensure that cryptocurrency does not become more popular,” he said, according to Interfax.
The announcement did not appear to knock the price of bitcoin, which rose 1.8 percent against the dollar on Thursday. Later China announced all cryptocurrency operations not allowed Last September, the currency went down but returned a few days later.
Elvira Nabiullina, Russia’s central bank governor, has been a long-time skepticist about cryptocurrency.
“There are significant risks of crypto currencies being used for money laundering and banned activities, and we have been working hard to eradicate the monetary policy of illegal and questionable activities,” he said in an interview with FT last year. “Most of the bank certificates we confiscated because they do questionable things like this.”
“We’ve already overcome this problem and we don’t want it to get in the back door.”
In a report, Russia’s central bank said crypto increasing already hot inflation was “reducing the regulation of monetary policy” and warned that it could be used to “do illegal activities”.
Russians made about $ 5bn in cryptocurrency transactions last year, according to the central bank.
Russia also launched a highly prosperous mining business after China banned the practice last year. Cheap electricity prices and cold temperatures in eastern Siberia have been a factor for mining companies, which rely on large data centers filled with speed computers. Russia’s share of bitcoin mining increased by 11% last year from 6.8% in 2020.
Russia is the third largest cryptocurrency mining country in the world, according to data from the Cambridge Center for other currencies, after the US and Kazakhstan. Huobi, one of the largest retailers, said in September that Russian consumers account for 10 percent of the company’s sales.
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But Russia’s largest bank said the mines could undermine Moscow’s attempts to undermine its natural resources, putting the country’s electricity crisis at risk.
In October last year, Russia’s energy service said it was considering early tariffs on cryptocurrency mining, following a major uptick in energy operations in areas such as Irkutsk in China’s months-long ban.
The Irkutsk governor warned ministers of a “massive power outage” due to the large number of miners, but later said the mines should be described as “commercial activities.”
By January, mining activity was off connected power outages in digital media.
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