Russian Central Bank proposes ban on cryptocurrency use and mining

 The Bank of Russia has come out with a consultation paper that plans the future of cryptocurrencies in the country. Titled "Cryptocurrencies: Trends, Risks, and Regulations," the paper proposes a blanket ban on the use and mining of all cryptocurrencies.

• What's the Story?

Russia has already outlawed accepting cryptocurrency as a means of payment in exchange for goods or services. However, the report focused on additional penalties for those flouting this norm. Upping its hostile regulatory ante against cryptocurrency trading and mining in Russia, the country's central bank today called for a blanket ban on cryptocurrencies, citing them as "volatile and widely used in illegal activities", and a threat to the country's financial stability, citizens’ wellbeing and the sovereignty of its monetary policy.

The report titled "Cryptocurrencies: trends, risks, measures" observed that cryptocurrencies "offer an outlet for people to take their money out of the national economy, thereby undermining it and making the regulators job of maintaining optimal monetary policies harder."

While the country had given legal status to cryptos in 2020, Russia has already outlawed accepting cryptocurrency as a means of payment in exchange for goods or services. However, the latest report focused on additional penalties for those flouting this norm. This comes weeks after the Central Bank of Russia announced its plans to collect information from commercial banks with regards to certain private money transfers, including details of clients who traded in cryptocurrency both in the country and abroad.

• What's Next?

Russia has argued for years against cryptocurrencies, saying they could be used in money laundering or to finance terrorism. Several other countries have also expressed their concern over the growing popularity of Bitcoin, Ethereum, and several other cryptocurrencies and it will be very interesting to see how things shape up in the near future as the chance of misuse of this technology is also very very high.