Crypto Regulation – Russia to Ban Crypto Mining and Usage
The proposed crypto ban includes trading exchanges. Binance, a crypto exchange, told Reuters it remained dedicated to working with authorities and anticipates a dialogue with regulators to keep its crypto users in Russia.
On Thursday, January 20, the central bank of Russia declared plans to suspend crypto mining and usage in the country, citing financial stability, fiscal policy sovereignty, and citizen’s wellbeing threats.
The move by Russia is the latest in the worldwide crypto clampdown as regulators from the US to Asia worry that highly volatile and privately run cryptos might undermine their monetary and financial systems’ control.
Russia has had a negative view on crypto for years, stating they might fuel money laundering or illegal actions such as terrorist finance. The nation gave the assets class a legal grade in 2020 but suspended its use for payments.
The central bank’s Thursday report suggested that speculative demand determined crypto’s rapid growth. It added that the assets have features of financial pyramids, warning about possible bubbles in the crypto industry, threatening citizens, and financial stability.
The proposed crypto ban includes trading exchanges. Binance, a crypto exchange, told Reuters it remained dedicated to working with authorities and anticipates a dialogue with regulators to keep its crypto users in Russia.
Central bank’s official Elizaveta Danilova revealed that the regulators do not restrict crypto ownership. The bank stated that crypto users in Russia have a yearly transaction volume of nearly $5 billion.
Following China?
The central bank revealed collaborating with regulators in nations that registered crypto exchanges to gather info about operations by Russian clients. It highlighted steps taken by other regulators to curb crypto activity, like China.
China tightened its crypto crackdown with a complete ban in September. That hit Bitcoin and other top assets while pressuring blockchains and crypto-related stocks. However, Danilova said that Russia does not have plans to ban crypto, like China.
Crypto Mining
Russia ranks third globally in BTC mining, behind Kazakhstan and the United States. Although the former might witness miner migration amid worries of tightened regulation after unrest early on the month.
Bank of Russia declared crypto mining leads to energy consumption problems in the nation. Mining crypto requires powerful computers to solve complex puzzles. The process consumes massive power, and often miners use fossil fuels.
Keep in mind that the central bank plans to introduce its digital ruble. It stated that crypto usage might limit monetary policy sovereignty.