The Central Bank of Russia wants to ban cryptocurrencies.
Russia continues to get tough on crypto-assets. The country’s Central Bank has just released a report recommending an outright ban on the use of cryptocurrencies in the territory. But the Russian government might oppose it.
The report published by the Central Bank of Russia mentions several risks associated with cryptocurrencies. Crypto-assets are compared to pyramid scheme type scams; they would also endanger the sovereignty of Russian state monetary policy.
The report also targets the mining industry: the Central Bank of Russia considers that it is an obstacle to the ecological objectives of the country. Moreover, miners would also hog the power grid, negatively impacting consumers. The results are therefore particularly negative, again according to the institution:
“The potential financial stability risks associated with cryptocurrencies are much higher in emerging markets, including Russia”.
Follow in China’s footsteps?
A possible ban on mining would bring Russia closer to China, which has stopped mining operations on its territory since last summer. This recent development is no coincidence: the miners in multiples headed for other countries, including Russia.
The territory garnered 11% of the global hashrate last August, according to CBECI data. This development makes the country the third-largest mining centre in monthly hashrate.
But according to Bloomberg, the Central Bank could encounter some opposition in the Duma, the Russian Federal Assembly. The head of the industry committee, Vladimir Gutenev, thus estimated that Russia has a competitive advantage in mining cryptocurrencies and people can take advantage of it.
Beyond mining, Russia has already opted for a particularly restrictive policy regarding crypto-assets. Cryptocurrency payments were banned in August 2020. A ban on mining would therefore be a further step in this direction. This ban would, in any case, have consequences on the hashrate of Bitcoin. But as we have seen with the example of China, the latter seems to be able to recover pretty quickly from this type of event.