And here, we witnessed another blow to the crypto industry with the Central Bank of Russia proposing to put a ban on cryptocurrency mining and investment. As revealed, this has been done considering the fact that the governments around the world are hammering the decentralized currencies, citing that they are a threat to monetary stability.
The Central Bank of Russia recently released a statement that said, “speculative demand” is what is driving the rapid growth and development of decentralized cryptocurrencies. Along with this, it is contributing significantly to the risks creating a bubble in the market.
In addition to this, it should be noted that the bank said cryptocurrencies are showing signs of a possible financial pyramid. This is because the surge in their prices is massively driven by demand exhibited by investors who are new in the market.
It seems like the Central Bank is in no mood to let the investors relax when it comes to cryptocurrencies. In the consultation paper, the bank outlined its position and mentioned that it seeks to prohibit financial institutions from making an investment in cryptocurrencies.
Moreover, the businesses associated with cryptocurrencies will also be banned as it facilitates the circulation of decentralized currencies. As far as mining is considered, Russia was home to the third-largest share in the global crypto mining market, but it won’t be now.
The Central Bank proposed banning crypto mining cited a threat to the financial stability of Russia via its non-environment friendly consumption of electricity.
The head of financial stability at the Central Bank told RIA Novosti that the Central Bank is planning to draft amendments to Russian legislation to prohibit crypto mining and investment in the future. However, the purchasing and investing in cryptocurrencies through exchanges is allowed under the latest alteration.
What more to lay an emphasis on is the fact that the Central Bank is in discussions to issue its own digital Ruble to take authority of its financial and monetary system.