The Russian central bank wants to restrict cryptocurrency investments in the country, citing the rising volume of cryptocurrency transactions as a danger to financial stability.
Russia’s central bank is aiming to criminalise cryptocurrency investments, further entrenching the country’s long-standing suspicion of Bitcoin and other digital assets. While future transactions would be restricted, current holders would not be compelled to sell.
According to Russian officials, cryptocurrency may be used for money laundering and terrorist funding. Reuters reports that the bank’s current position on bitcoin is one of “total rejection.”
Although bitcoin transactions remain illegal in Russia, a new law has made it legal to invest in and purchase cryptocurrencies via exchanges.
Such restrictions risk suffocating Russia’s current retail investment boom, which has seen 15 million Russians open brokerage accounts in recent years, according to Central Bank estimates.
The regulator has previously taken swift action to limit access to other dangerous investment products, predicting that Russia’s poor financial literacy and aggressive broker marketing may lead to customers being enticed into high-risk investments. Retail investors must pass a series of tests before investing in goods such as options and derivatives.
In a Friday news conference, Elvira Nabiullina, the governor of Russia’s Central Bank, exacerbated the fear, uncertainty, and doubt (FUD) surrounding the country’s present condition of crypto regulation. When questioned about the emergence of digital assets, Nabiullina told finmarket.ru, a local news site, the following:
“As you are aware, our position regarding cryptocurrencies is one of scepticism, to put it frankly. This is in addition to the huge dangers for ordinary investors and the high volatility associated with this sort of asset. Additionally, cryptocurrencies are opaque in the sense that they are commonly utilised for unlawful or criminal activities. As a result, we cannot support investment in them. We want to deter Russia’s financial infrastructure from using cryptocurrency transactions. This is entirely feasible.”
Illegal Miners Will Be Arrested
Andrey Lugovoy, a State Duma member, has threatened miners with prison time if they connect their equipment to the electrical grid without authorization.
Lugovoy said in November that his nationalist Liberal Democratic Party of Russia is prepared to present a draught legislation regulating cryptocurrency mining. According to the congressman, passage of the measure would benefit Russian citizens, the government, and enterprises seeking to do legal business.
In an interview with the Russian online news source Lenta.ru, he has now added that mining control makes sense. Apart from charging mining companies different rates for electricity, the deputy thinks their earnings should be taxed after subtracting the cost of energy utilised and other costs such as labour. Lugovoy said that miners evaded taxes by using subsidised, low-cost power.
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