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Russian Personalities Warn About the Consequences of Banning Bitcoin

  • Prominent Russian businessmen and politicians have raised their voices in protest against government threats to ban Bitcoin and limit the crypto industry.
  • The Central Bank of Russia’s proposal comes at a time when tensions are rising over conflict between Russia and Ukraine.
  • Pavel Durov claims to be in favor of the regulations, but asks for care and balance in their application.

Telegram CEO and founder Pavel Durov has joined the chorus of critics of the Central Bank of Russia’s proposed move to ban Bitcoin and the mining and trading of cryptocurrencies in the country.

In a message posted on Telegram, Durov remarked that any restrictions put in place over the crypto industry would only encourage IT specialists to send their cryptocurrencies out of the country, “destroying a whole range of high-tech economies.”

The central bank’s proposal has been launched at a time when tension between Russia and the West are particularly high. NATO troops continue to deploy in the region this week, ready for a Russian army invasion of Ukraine at any moment.

In the opinion of the Russian businessman and billionaire, if the measures requested by the issuer are approved, the entire blockchain industry is likely to be affected.

The Central Bank of Russia considers cryptocurrencies to be serious threat to the country’s financial stability. In its statement, the issuer said that the sovereignty of monetary policies and the well-being of Russian citizens would be in danger.

Bitcoin’s Price Stumbles

The threat against BTC and cryptocurrencies in Russia last week have already had an impact on its price. The cryptocurrency fell to $34,392 on Saturday, but has made a slight recover by Tuesday at 8:04 a.m. (ET) to $36,558.

Some of the most qualified specialists in the global crypto industry are located in Russia. According to Durov, these individuals would be forced to send their money out of the country were the proposal to be approved.

Contrary to the belief of the Central Bank of Russia, the Telegram executive believes that Bitcoin technology “improves the efficiency and security of many human activities, from finance to the arts.”

He added that “distributed ledger database solutions using cryptocurrencies as units of measurement are replacing the obsolete period of financial systems in the second half of the XX century.”

On the Flipside

  • While Durov accepts that regulation is necessary, he also believes that such measures must be applied carefully and in a balanced way.
  • He argues that if Russian authorities act prudently and promote “careful regulation, it will allow the country to balance the distribution of forces in the international financial system and become one of the main players in the new economy.”

Although they are in the midst of conflict, Durov suggests that his country observes what its neighbors Ukraine and Uzbekistan are doing. In his opinion, these countries have adopted a “progressive” regulatory framework around the crypto industry because “they do not want to be left out of technological and economic progress.”

Finally, Durov opined that banning BTC may well kill off illegal players in the industry, but it would also effectively put an end to various legal projects being developed in the Russian cryptocurrency industry.

Interests at stake will avoid the ban

Russian opposition activist and politician Leonid Volkov, for his part, reamrked on his certainty that Bitcoin will not be banned in Russia, as there are many interests at stake within the government. The Progress Party member, and successor of imprisoned former presidential candidate Aleksei Navalny, believes that eliminating cryptocurrencies is impossible.

Volkov argues that in promoting the ban on BTC in the country, the involvement of the Russian Federal Security Service (FSB) has been instrumental. The agency considers cryptocurrencies to be a vehicle used to finance “non-systemic opposition and extremist organizations.”

He claims not to fear the potential of cryptocurrencies being banned in Russia, as Russians are more likely to use them to buy drugs rather than donate them to the government.

“Technically, banning cryptocurrencies is the same as banning person-to-person transfers (i.e. impossible)… Yes, they can make it very difficult to deposit funds on cryptocurrency exchanges, which means that intermediary services will simply appear that will do it through foreign jurisdictions,“ he added.

Why You Should Care

  • Russia is the epicenter of the political conflict between the East and West at the moment. What happens on the border between Russia and Ukraine in the coming weeks is bound to have profound repercussions on the crypto market and the world economy.

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    This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

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