THECRYPTO.WATCH – Crypto hampers Central Bank monetary policy. Russia banned crypto but launched digital ruble. “Cryptocurrencies are unstable” Putin insisted.
Not yet recovered from the shock caused by the policy of the US Central Bank The Fed, crypto is again hit by slanted news. Russia banned crypto. This was revealed by a spokesman for the Central Bank of Russia on Thursday, January 20, 2022. But on the other hand, it turns out that Russia itself launched the Digital Ruble.
Reasons Russia Banned Crypto
In 2020, Russia condemned the use of crypto. Now the Central Bank of Russia is calling for the ban again. Russia prohibits its financial institutions from serving all kinds of transactions related to cryptocurrencies. The transaction is without exception.
Not only that, Bitcoin mining in the country is also considered an illegal practice. This step was taken due to environmental concerns. As it is known, mining crypto coins, especially Bitcoin, is very resource-intensive.
However, the most crucial reason Russia banned cryptocurrencies was because they considered cryptocurrencies could damage various monetary policies of the Central Bank. Crypto movement is considered too volatile because it is operated privately without third party intermediaries. It is feared that it will undermine the control of the Central Bank in various rules and regulations in the future.
So the Central Bank of Russia prohibits mining, investing, and even transacting in cryptocurrencies. In fact, Russia is the third largest country for crypto users. Its position is under the United States and Kazakhstan.
It should be underlined that this prohibition is only aimed at financial institutions. Not an individual. So the good news is that Russian crypto investors are still entitled to keep their coins. There are no forced selling consequences from the government in this regard.
Russian President, Vlademir Putin seems to still have doubts about this. Putin supports crypto as a means of payment, but not for exchanging natural resources such as gold or oil.
This is because there is no clear regulation regarding crypto as a price trigger reference. It would be very dangerous if central resources made crypto as a medium of exchange. “Crypto is unstable,” he said.
Uniquely, despite rejecting crypto, Russia itself plans to issue digital rubles. Like China, which has issued a digital Yuan first.
So, even if the Central Bank of Russia banned crypto, it would not have a significant effect on the price of the crypto itself. This could be Russia’s move to prioritize the use of the digital ruble, which it will launch as a legal tender. We will see later!