Russian Central Bank Calls For Ban of Cryptocurrency Mining
13:12 GMT 20.01.2022 (Updated: 13:16 GMT 20.01.2022)
MOSCOW (Sputnik) - The Russian Central Bank on Thursday called for banning cryptocurrency mining in Russia over significant risks for economic and financial stability.
"The Bank of Russia believes that the current scale and further spread of cryptocurrency mining in Russia carry significant risks for the economy and financial stability," the regulator said in a report.
The bank thinks that mining creates an unproductive consumption of electricity and jeopardizes the energy supply of residential and social infrastructure buildings.
"In this regard, according to the Bank of Russia, the best solution is to introduce a ban on cryptocurrency mining in Russia," the report read.
The acquisition of cryptocurrencies may directly threaten the well-being of citizens, the Russian Central Bank said in a report on Thursday, adding that such investments create risks for the financial market.
"The acquisition of cryptocurrencies by citizens poses a direct threat to their well-being, there are no guarantees of the return of these funds. In the case of massive distribution of this kind of investment, this can lead to the realization of social risks," the regulator said.
The risks of financial stability from the use of cryptocurrencies are still limited, but they will increase significantly with more involvement of citizens, the report read.
The Central Bank also said that there are risks of a bubble in the growing cryptocurrency market.
It has also proposed to ban the issuance, organisation of circulation and exchange of cryptocurrencies in Russia.
"Introduction of a ban on organising the issuance and (or) issuance, organisation of the circulation and exchange of crypto-currencies (including crypto-exchanges, crypto-exchangers, P2P platforms) on the territory of the Russian Federation and establishing liability for violation of this ban," the regulator said in a report.
Certain tools should be developed to block transactions aimed at buying or selling cryptocurrencies for fiat currency, the regulator added.