According to an exclusive report by Reuters, Russia’s central bank is seeking to impose a total ban on crypto trading in the country. The central bank sees crypto trading as a risk to the financial stability of the nation.
Effect On The Market
Shortly after the report was revealed, the price of BTC fell from around $49,144 to around $48,656. However, the impact was short-lived and the price has since stabilized around the $48,700 point.
Russia Has Never Been A Fan Of Crypto
Russia has never been a fan of the crypto sector. For years, the nation has argued that crypto could be easily used for money laundering and terror financing. In 2020, the nation finally decided to give legal recognition to the sector. However, it is illegal to use crypto as legal tender in Russia.
According to the Reuters report, Russia’s central bank has entered into talks with experts and market players on how a possible crypto ban would work. The ban, if approved, would likely apply to new purchases of crypto. However, those who had bought crypto could continue to hold onto it. The report noted that the position of the Russian central bank was to completely reject all types of cryptocurrencies. While responding to Reuters, the central bank said that it was working on an advisory report, which would make its view on crypto clear.
Crypto By The Numbers In Russia
In Russia, annual crypto transactions by volume are around $5 billion according to data from the central bank. Their rising popularity has raised concerns about their risk to the financial stability of Russia. The central’s bank’s First Deputy Governor, Ksenia Yudaeva, has in the past been quite critical of the sector. He once compared crypto to a shadow financial system. In his opinion, the use of crypto lowered the efficiency of monetary policies.
Yudaeva pointed to China, which has imposed a total crypto ban. She said that the country needs to further adjust its crypto regulation. In September, China revealed that it was ramping up its crackdown on crypto. It announced that it would ban all crypto mining and transactions in the country. The effect on the market was huge. It affected not only the coins but also put pressure on crypto and blockchain-related stocks.
Plans For A CBDC
While Russia’s central bank would like a total ban on crypto trading imposed in Russia, it does plan to issue a CBDC. While an exact date has not been revealed, it would not be the first central bank to do so. Numerous central banks globally, such as those of China, South Korea, the UK, Hong Kong, France, and Switzerland are in the advanced stages of exploring a CBDC.
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