Countries around the world have adopted diverse frameworks through which to regulate the fast-growing crypto industry as digital assets proliferate and dominate the financial sector.
While countries like El Salvador, Switzerland, Malta, and Singapore have embraced cryptocurrencies, Russia looks to join the likes of China, Mexico, and Spain, where digital assets have been completely outlawed.
Central Bank of Russia Proposes Crypto Ban
On Thursday, January 20th, the central bank of Russia proposed a blanket ban on the use, trading, and mining of all cryptocurrencies within its borders.
Russia’s apex bank cites the dangers posed to the country’s financial system and environment as the reason for the move to ban cryptocurrencies and related activities.
According to its Thursday report, cryptocurrencies bear the hallmarks of a pyramid scheme, and undermine the sovereignty of the nation’s monetary policy.
In December, the central bank banned crypto for payments made within its borders. However, it now looks poised to effectively outlaw crypto in the country entirely, with a turnover at about $5 billion annually. An excerpt from its Thursday report reads:
“Potential financial stability risks associated with cryptocurrencies are much higher for emerging markets, including in Russia.”
Concerning the topic of crypto mining, the central bank explained that it directly impacts the nation’s green agenda. Moreover, according to the apex bank, the process of mining cryptocurrency jeopardizes Russia’s energy supply.
If the law passes, cryptocurrencies would effectively be outlawed by one of the world’s biggest crypto-mining nations, marking a repeat of China’s own ban, and the ensuing Great Mining Migration.
On the Flipside
- Russia is home to a thriving mining industry, and there are hopes that the proposal will be discussed with representatives of the crypto industry.
Why You Should Care
As the crypto industry matures, there have been calls for global regulation to ensure the industry’s sustainability.