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On January 20, 2022, the Central Bank of the Russian Federation (CBR) released a report to urge a complete crypto ban inside Russia. Of course, this isn’t the first time that the financial institution tries to go against cryptocurrencies in general. Previously, they’ve cited possible risks for retail investors and the national financial sovereignty as well.

This time isn’t much different. In the report titled “Cryptocurrency Risks and Possible Regulatory Measures”, the bank claims that the use of cryptocurrencies may imply risks for the Russian citizens and financial stability. Besides, they consider that cryptocurrencies and stablecoins are being used in illegal activities.

Currently, Russian crypto users have to face strict limitations. They can’t pay for goods and services with crypto, and any undeclared holding over $1,300 is finable to even 40%. Additionally, government officials aren’t allowed to own cryptocurrencies, and they seize any illegal cryptocurrency.

Crypto-ban-Russia-2022

Those measures aren’t enough for the central bank, apparently. They want to ban any transaction with cryptocurrencies, especially the ones against local currency —which could include a crackdown on crypto exchanges. Indeed, since previous months, the CBR has been working with other national banks to slow down cryptocurrency payments.

Cryptocurrency mining isn’t welcome by the bank either. According to them, crypto mining poses a risk for the national energy system. So, the best would be a full ban against such activity. The only thing they’d permit would be the holding of cryptocurrencies by their citizens in foreign jurisdictions. On the contrary, inside Russia, they’d track crypto transactions and apply legal measures to the traders.

Luckily, te crypto ban is barely a proposal right now in Russia. Take it or not depends on the State Duma and the Federation Council.

Crypto in Russia

Despite the legal hostilities, Russia is one of the countries with more cryptocurrency users worldwide. A recent survey even found out that around 77% of Russian investors prefer crypto to gold and Forex. Additionally, since China’s crypto crackdown in 2021, a huge percentage of Bitcoin miners from there flew away to Russia, which is a near alternative.

Subsequently, by August 2021 [CBECI], this country became the third-largest Bitcoin miner worldwide. And that worries the crypto users now because a new huge migration of miners could hit the speed of the network and the BTC price. Just like it happened with China —temporarily, though.

BTC-mining-share-Russia
BTC Mining share by country. Source: CBECI

Some Russian experts and national members of the industry have spoken out against such a move. In summary, they believe that a full crypto ban will only delay Russia technologically, scare away foreign investors, and even make young talents and entrepreneurs seek to migrate as well. The consequences would be economical eventually, while the crypto industry would hardly disappear from the country.

In the meantime, at least, the CBR is open to comments and suggestions for this proposal until March 1, 2022. And there’s no doubt that every crypto player inside the country will suggest a lot of changes.


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Author

I'm a literature professional in the crypto world since 2016. It doesn't sound very compatible, but I've been learning and teaching about blockchain and cryptos for international portals since then. After hundreds of articles and diverse content about the topic, now you can find me here on Alfacash, working for more decentralization.

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