Central Bank of Russia Intends to Ban Crypto Mining and Activities

The Central Bank of Russia (CBR) is going on the offensive in relation to the digital currency ecosystem in the country as the apex bank is calling for a blanket ban on crypto-related activities.

In a newly published report titled “Cryptocurrencies: Trends, risks, measures,” the bank draws a close comparison between the nascent world of crypto and Ponzi schemes, saying both have similarities.

Advocating for a ban on the use of digital currencies either in the form of trading or mining throughout Russia, the Kremlin is looking to set a new precedent that will offset the balance the industry has enjoyed for the past few months. The report proposes that the current ban on the industry should be reinforced with punishments for offenders.

The authors of the report are further convinced that an outright ban is a way to go, seeing cryptocurrencies have the potential to disrupt the country’s financial sovereignty and could aid people in taking money out of the national economy.

Russia is particularly concerned that the offset cryptocurrencies will introduce in the mid to long term is not healthy for the country as well as other emerging markets.

“Potential financial stability risks associated with cryptocurrencies are much higher for emerging markets, including Russia,” the report reads.

When China banned Bitcoin mining last year, miners migrated their hardware to neighbouring countries including Kazakhstan and Russia. In fact, Russia became the third-largest country in terms of hashrate distribution, and the proposed ban by the CBR will further offset the balance in the industry.

Anto Paroian, Chief Operating Officer, at cryptocurrency hedge fund ARK36, believes the uncertain ban will outlaw any crypto mining activities. “As this would negatively affect Bitcoin’s hashrate, some investors may be wondering whether the ban, when enforced, could result in more selling pressure on the price of this asset.”