Russian Central Bank Lays Groundwork to Prohibit Cryptocurrency Investments

According to Reuters, Russian central bank authorities are considering outlawing cryptocurrency investment in order to mitigate financial stability concerns associated with a surge in cryptocurrency deals. The Bank of Russia is in discussions with market participants and specialists about a potential ban, according to the article, which cited two anonymous financial market insiders familiar to the central bank.

According to one insider, the prohibition may affect new cryptocurrency purchases but not earlier trades. Another central bank insider said that the central bank’s current stance is one of “complete dismissal” of all cryptocurrencies.

In response to a Reuters request for clarification, the Bank of Russia said that it was producing an advisory paper outlining its position on the subject. It made no explicit reference to anything. The growing influence of cryptocurrencies has prompted worries about financial stability, First Deputy Governor of the Central Bank Ksenia Yudaeva stated earlier this month. As per the survey, the yearly amount of cryptocurrency transactions conducted by Russians is around $5 billion.

Russia has been vocal in its opposition to cryptocurrencies for years, claiming they may be used to launder money or support terrorists. The nation granted them legal status in 2020 but prohibited their usage as a mode of payment, the article said. Russia’s crypto prohibition would be similar to China’s. Beijing deemed all cryptocurrency trades unlawful in September as part of an increasing assault on the industry.

Nonetheless, the cryptocurrency market has exploded this year as institutional and ordinary investors alike have entered. Its market capitalization reached $3 trillion for the foremost time but has subsequently fallen to roughly $2.3 trillion.