Russia’s central bank, the Bank of Russia, has called for a total ban on cryptocurrency, including the issuance, trading, investment in and mining of digital assets.
The central bank released a 37-page consultation paper, which stated that the broadening use of cryptocurrency in Russia posed a threat to the country’s economic development.
“The potential risks from cryptocurrencies to financial stability are significantly higher in emerging markets, including Russia.”Bank of Russia
In the paper, the Bank of Russia emphasized what it sees as the “negative impact of cryptocurrency on monetary policy”. Furthermore, the Bank stated that cryptocurrencies are more dangerous for developing markets than for developed ones.
“The spread of cryptocurrency leads to citizens’ savings leaving the traditional financial sector,” the Bank of Russia went on, “restricting its ability to finance the real economy.”
The bank also said that the growing use of cryptocurrency is causing Russian interest rates to be higher than what they would otherwise have been, thus hindering the Banks efforts to combat inflation.
The Bank of Russia called for a total ban on the issuance and trading of cryptocurrencies within Russia, as well as a ban on the investment of financial institutions’ assets in cryptocurrencies and related financial instruments.
Instead of allowing cryptocurrencies, Russia should focus on improving its payment system by developing it’s own digital currency, the Bank of Russia said in its paper.
“Central bank digital currencies are a new payments infrastructure, allowing citizens, businesses and the state to complete monetary operations at minimal cost.”
“The advantages of cryptocurrencies, such as speed, convenience and the relative cheapness of monetary operations can be achieved through faster payments systems and, in future, through national digital currencies,” the Bank of Russia said.