RUSSIA is set to issue a complete ban on all cryptocurrency trading and mining – essentially freezing $92 billion worth of digital assets.
The central bank of Moscow has proposed a comprehensive ban on the use and creation of all cryptocurrencies within Russia’s borders.
Russia is the third largest cryptocurrency mining country in the world – and currently has $92 billion in assets held in 17 million crypto wallets.
Vladimir Putin’s security services have complained that they see cryptocurrencies as a problem.
In a new report, Russia’s central bank said it considers cryptocurrencies to “bear the mark of a pyramid scheme.”
And it warned bankers that believe cryptocurrencies pose a “threat to the Russian financial system” and undermine the country’s economic sovereignty.
The central bank insists it will not ban citizens from owning cryptocurrencies – but transactions using digital currencies will be banned.
It is unclear how big of an impact this will have on the already struggling and volatile crypto markets.
Bitcoin – the world’s largest cryptocurrency – has sagged, down 35.2% since its record high.
However, there were signs of recovery as it peaked above $40,000 per coin earlier in the week.
High volatility and sudden market drops are one of the reasons why investing in cryptocurrencies is a very risky business.
You should never invest in something you don’t understand well and make sure you don’t put in money you can’t afford to lose.
Putin’s central bank also stated that cryptocurrency mining – which sees computer systems running to solve mathematical problems for money – compromises the “agenda green” of the country.
The potential risks to financial stability associated with cryptocurrencies are much higher for emerging markets, including in Russia, the Central Bank of Russia report said.
“This is due to a traditionally higher propensity to save foreign currency and an inadequate level of financial literacy.”
The price of Bitcoin crashed earlier this year after Russia’s neighbor Kazakhstan cut off the internet in the midst of a wave of unrest.
Kazakhstan – which is the second largest Bitcoin mining hub after the US – accounts for 17% of global Bitcoin production.
It is likely that the proposed ban in Russia on mining and trading will affect the value of the cryptocurrency.
Russia’s Federal Security Service (FSB) has been lobbying for a comprehensive ban on cryptocurrency as it is increasingly used by opposition groups and unwanted media outlets, reports fox Bloomberg.
However, Elizaveta Danilova, the bank’s director, insists the new crackdown is not an outright ban on cryptocurrency ownership.
“We note that we are not proposing a ban on citizens owning cryptocurrencies,” she said.
Russia became the world’s third-largest cryptocurrency miner last year, according to Cambridge University data.
Cryptocurrency mining pools exist in the north of the country and in Siberia, where temperatures are low and energy is cheap.
And this week, Vyacheslav Volodin, speaker of the Russian lower house of parliament, said it would create an established regulatory plan for cryptocurrencies.
Putin’s biggest rival Alexei Navalny has already accepted crypto donations, with his office holding up to $4 million in Bitcoin.
And the Meduza news site, branded as a “foreign agent,” also took cash in the form of cryptocurrency.
Meanwhile, it comes as fear Russia may be about to invade neighboring Ukraine.
That would be a move that is likely to shake the market and capable of causing a great war in Eastern Europe.
Risks of buying with cryptocurrencies
Investing and buying with cryptocurrencies like Bitcoin is very risky.
Their value is volatile and the City’s watchdog, the Financial Conduct Authority, has warned investors to be prepared to lose all of their money.
Investing in cryptocurrencies is not a guaranteed way to make money.
You should also think carefully about making purchases with cryptocurrency.
For example, Bitcoin has experienced dramatic price swings in recent months, and prices can change almost hourly.
Bitcoin price was at $40,258 on January 9, according to Coindesk, but fell to $34,214 just three days later.
That’s a 15% discount.
These price movements are risky for a business because you can sell an item with Bitcoin at one price and the value can drop shortly after, leaving you with less money from a purchase or sale.
Similarly, the price of Bitcoin has increased by more than 21% since the beginning of this week, so it can be difficult for buyers to get an accurate idea of the price of an item if its value changes on a daily basis.
https://www.the-sun.com/money/4502351/russia-ban-cryptocurrency-trades-mining/ Russia Begins COMPLETE COMMITTEE ON Cryptocurrency Trading and Mining