Russia has already made it illegal to accept cryptocurrencies as a form of payment in exchange for products or services. On the other hand, the study emphasized the need for increased punishments for individuals who break the rules.
Ruling out cryptocurrency trading and mining in Russia, the country's central bank today called for a blanket ban on cryptocurrency, claiming that they are "volatile and widely used in illegal activities" and that they pose a threat to financial stability, citizens' welfare, and the country's ability to conduct monetary policy on its terms.
People's money is being taken out of the national economy, according to the research "Cryptocurrencies: Trends, Risks, and Measures," which states that cryptocurrencies "undermine the national economy and make the regulators' task of maintaining appropriate monetary policies more difficult."
These developments come only weeks after the Central Bank of Russia revealed intentions to gather information from commercial banks about some private money transactions, including the identities of customers who dealt in crypto ban both inside Russia and overseas.
Although the nation granted bitcoin legal status in 2020, Russia has already prohibited the acceptance of the crypto ban as a form of payment in exchange for goods or services. On the other hand, the most recent study focuses on increased consequences for individuals who defy the established norm.
According to reports, the bank is also working on introducing its own digital currency (CBDC), also known as the digital ruble, which it believes will be the future of banking in the country, satisfying the citizens' demand for quick, efficient, and inexpensive payment options, as well as reducing costs.
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In addition, the nation intends to rid its financial system of any traces of Russia ban crypto. Apart from continuing to prohibit Russian mutual funds from investing in cryptocurrencies, the report recommended that the country's institutional investors refrain from investing in cryptocurrency and that the country's financial organizations refrain from holding crypto ban as part of their assets. It has also been advocated that people who violate this rule face appropriate consequences.
The vast list of prohibitions does not come to an end here. While the report already stated that it was necessary to prohibit any crypto ban-circulation in the country by prohibiting online cryptocurrency exchanges, over-the-counter trading desks, and peer-to-peer platforms, it raised several important questions, one of which was the issue of clipping the currency's supply.
Introducing a ban on bitcoin mining in Russia would be the most effective option.
According to the Cambridge Bitcoin Electricity Mining Index, Russia (11.23 percent) is a central mining hub, trailing only the United States (35.40 percent) and Kazakhstan (18.10 percent) in terms of average monthly hash rate, which is an indicator of the volume of a ban on crypto mining undertaken in the region as of August 2021.
The announcement might ruffle some feathers, especially in light of the current Kazakh shutdown of electrical supplies for cryptocurrency mining. However, most miners are not startled, stating that the likelihood of an "outright" ban cryptocurrency is remote and that the bank is only repeating its past position on the issue.
Mining is described as the "best" and "optimal" solution for Russia in the crypto ban news report, which also points out that mining "creates a non-productive electricity expenditure, which undermines the energy supply of residential buildings, social infrastructure, and industrial objects," as well as the Russian Federation's environmental agenda.