-3.7 C
Sofia
Sunday, January 23, 2022

Russian cenbank to seek ban on investment in cryptocurrencies

Russia has argued for years against cryptocurrencies, saying they could be used in money laundering or to finance terrorism.

The Russian central bank wants to ban investments in cryptocurrencies in Russia, seeing risks to financial stability in the rising number of crypto transactions, two financial market sources close to the bank said.

(Sign up to our Technology newsletter, Today’s Cache, for insights on emerging themes at the intersection of technology, business and policy. Click here to subscribe for free.)

Leading cryptocurrency bitcoin fell after the report to $48,656 from levels around $49,144 seen shortly before.

Russia has argued for years against cryptocurrencies, saying they could be used in money laundering or to finance terrorism. It eventually gave them legal status in 2020 but banned their use as a means of payment.

The central bank is now in talks with market players and experts about a possible ban. If approved by lawmakers, it could apply to new purchases of crypto assets but not to those bought in the past, said one of the financial market sources, who requested anonymity due to the sensitivity of the matter.

Another source close to the Bank of Russia said the central bank’s current position was a “complete rejection” of all cryptocurrencies.

Also Read: Watch | Does Bitcoin have a future in India?

In a reply to Reuters’ request for comment, the central bank said it was preparing an advisory report to voice its stance on the issue. It did not comment on specifics.

Risks

The annual volume of cryptocurrency transactions carried out by Russians is about $5 billion, the central bank has said.

Central Bank First Deputy Governor Ksenia Yudaeva said this month that cryptocurrencies’ increasing popularity raised concerns about risks to financial stability.

“The situation in developed market countries more and more resembles the so-called shadow financial system,” Yudaeva wrote in an article, adding that use of cryptocurrencies lowered the efficiency of monetary policies.

Pointing to China’s experience, she said Russia needed a further adjustment of cryptocurrency regulation.

Also Read: Cryptocurrency exchange Coinstore enters India despite pending curbs on trade

In September, China intensified its crackdown on cryptocurrencies with a blanket ban on all crypto transactions and mining, hitting bitcoin and other major coins and pressuring crypto and blockchain-related stocks.

Meanwhile, the Bank of Russia is planning to issue its own digital rouble, joining the global trend to develop digital currencies to modernise financial systems, speed up payments and counter a potential threat from other cryptocurrencies.

BFIA Admin
The big boss.

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest Articles