Cryptocurrency may soon be banned in Russia under new proposal

Russia is considering becoming the latest country to ban cryptocurrency due to a series of concerns over its impact.

Russia is considering a complete ban on cryptocurrency due to concerns about the environmental impact and also the ability of users to evade financial regulations.

According to a report by the country’s central bank on Thursday local time, cryptocurrency mining and trading goes against Russia’s green agenda and can be used to launder money or finance terrorism.

The report estimates that the cryptocurrency industry generated $7 billion a year in Russia.

Cryptocurrency has a lot in common with a pyramid scheme, according to the bank, which also called on violators of crypto rules to face the full penalty of the law.

Although the bank’s suggestion to clamp down on cryptocurrency is just that — a suggestion — Russia appears to be speeding up parliamentary sessions so that a possible ban can go into effect as soon as possible.

Speaker of the lower house of parliament Vyacheslav Volodin revealed this week that lawmakers are creating a cryptocurrency regulatory framework that will be ready in time for the spring session of the Russian parliament.

According to the proposal, cryptocurrency could not be created, mined or traded on Russian soil, including preventing customers from using crypto exchanges.

Russians with offshore accounts could still trade cryptocurrencies.

If Russia’s proposal goes ahead, it would be a blow to the cryptocurrency market worldwide.

Russian citizens make up the third largest number of crypto miners, behind the United States and Kazakhstan.

Blockchain miners have made the most of Russia’s unique resources to maximize their mining, with people flocking to the north of the country and Siberia to mine blockchain because electricity is cheap there.

“The potential financial stability risks associated with cryptocurrencies are much higher for emerging markets, including Russia,” the central bank said.

He also cited environmental concerns for continuing to allow cryptocurrency mining and trading in an unregulated framework.

Bitcoin alone produces 36.95 megatonnes of CO2 per year from its transactions, which is similar to New Zealand’s total carbon footprint.

“The best solution is to introduce a ban on cryptocurrency mining in Russia,” the bank concluded.

Russia has never been a fan of cryptocurrency, this is not the first time attempts at regulation have scared off the crypto community.

In 2020, Russia would not allow the use of cryptocurrency to pay for things in the country.

In December, the government banned investment firms from putting money into cryptocurrency exchanges.

It’s not the only country considering tougher regulations and even banning blockchains.

Australia’s financial watchdog is calling for tougher regulation and in the US the Federal Reserve is considering greater restrictions this year.

China has gone further and completely banned everything related to crypto at the end of September last year in a major technological crackdown.

“Commercial activities related to virtual currency are illegal financial activities,” the People’s Bank of China said at the time.

The central bank said violators would be “wanted for criminal liability in accordance with law”.

It criminalized all related financial activities involving cryptocurrencies, such as crypto trading, token sales, transactions involving virtual currency derivatives, and “illegal fundraising.”

Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisia, and Bangladesh have also banned cryptocurrency.

In November, Indonesia also banned cryptocurrency for its entire Muslim population because it contained “elements of betting”.

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