Russian central bank officials are seeking to ban crypto investment to tame financial stability risks that it sees from an increase in crypto transactions.
The central bank is pushing for a ban on investments in bitcoin and other cryptocurrencies in Russia, pointing to risks to financial stability due to the growing number of crypto transactions, Reuters is reporting about this with reference to two sources close to the regulator.
According to them, the Bank of Russia is in dialogue with market participants and experts regarding a possible ban on investment in cryptocurrencies. If approved, the restrictions could be extended to new investments and will not affect purchases made in the past, one source said, asking not to be identified due to the significance of the issue.
Another source described the position of the Central Bank as a "complete denial" of cryptocurrencies. This perception of digital assets in the department is not unexpected, given the comments of the chairman of the Central Bank Elvira Nabiullina, and his other representatives.
“We consider it categorically wrong to legalize bitcoins in payments. It is a monetary surrogate. It is necessary not to legalize, so that people go into these dubious currencies even more, but to fight against the use for illegal transactions," Nabiullina said recently.
Earlier, the Bank of Russia came up with an initiative to ban investment in cryptocurrencies for mutual funds.
Who benefits from the crypto ban in Russia?
Cryptocurrency has become a part of the world's financial system, and the effectiveness of such solutions is like banning rain. Recall that cryptocurrencies were created taking into account their existence in conditions of total isolation.
In the event of a complete ban on cryptocurrencies on the territory of the Russian Federation, crypto owners will go underground, and the state will lose the ability to collect taxes from this market. The amount of potential tax from operations with cryptocurrency in the Russian Federation is about 200 billion rubles. Hence, neither side will benefit from the ban: neither the state nor the user.
Law enforcement agencies, in turn, will not be able to investigate crypto-related crimes through exchanges since they will have no one to send requests to.
We can also draw a parallel with the ban on casinos, which eventually went online and underground, leaving tens of thousands of people in the midst of the crisis without work, and the state without income.
When China banned cryptocurrencies, what happened? Have the Chinese started using it less? Of course not. It's just that everyone will become more careful, they will go underground.
Regardless of the final decision of the Bank of Russia on this issue, residents of the Russian Federation will continue to use cryptocurrencies and this will not affect the volume of transactions. Russians will bypass the ban and opt for P2P platforms for buying crypto, only it will become more difficult and costly.
People will follow the precedents, whether there will be punishments, and if so, which ones. Probably, there will be additional difficulties in exchanging cash for crypt and vice versa, but this does not mean that it will not be possible to exchange it, it will simply cost more.
Cryptocurrency companies will simply also bypass Russia, but the loss of Russian users will not be significant for them.
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