How Russia’s central bank could ban cryptocurrencies: expert response
Last week, it became known that the Central Bank of the Russian Federation is allegedly planning to impose a complete ban on cryptocurrencies in the country. So far, this information has only been circulating in the form of rumours, but journalists now have a bit more information about how exactly officials may affect the crypto-sphere in the foreseeable future. We tell you more about what’s going on.
As a reminder, the position of Russian Central Bank officials is broadly the same as that of coin critics from other countries. First of all, bankers are not satisfied with the volatility of cryptocurrencies, i.e. their sharp changes in value. According to government officials, this peculiarity will only end up with citizens losing money – and for some reason, they don’t even consider the reverse profit scenario.
On top of that, bankers regularly mention the link between cryptocurrencies and fraudsters and criminals. That said, as we know, all coin transactions are stored in a transparent blockchain forever, with data available to anyone. And that certainly doesn’t please people who overstep the law.
What will happen to Bitcoin in Russia?
On December 17, Elvira Nabiullina, head of the Central Bank of Russia, made a statement that the country’s main financial regulator is against cryptocurrencies being considered part of the Russian economy. It should be noted that buying and mining cryptocurrencies is not prohibited in Russia, but they cannot be officially used to pay for goods or services. And in the long term, digital assets will never replace the ruble – government officials have repeatedly emphasized this point in their speeches.
Read also: How the law on digital assets in Russia will prevent the anonymous withdrawal of cryptocurrencies
Central Bank governor Elvira Nabiullina
In an interview with Forbes, Andrei Mikhailishin, founder of cryptoproject Joys, talked about several ways in which the Central Bank can limit the activity of crypto investors.
The first of them is to block bank transfers to a card by MCC codes, i.e. a four-digit combination that is assigned to the creator of the payment. Cryptocurrencies and exchanges have their own MCC code – usually 6051. Thus, Russian digital asset lovers may lose a whole set of ways to conveniently deposit and withdraw funds from crypto platforms, which could significantly hamper the circulation of cryptocurrencies in the country.
However, this kind of ban would require the cooperation of Visa and Mastercard, whose representatives have not yet commented on the Central Bank's proposed initiative.
Founder of Cryptoproject Joys Andrey Mikhailishin
At the same time, not all officials support radical measures regarding the crypto market. On 20 December, the State Duma held the first meeting of the working group on cryptocurrency regulation, which was attended by Deputy Finance Minister Alexei Moiseyev and First Deputy Chairman of the Central Bank Olga Skorobogatova. According to them, the opinion of most participants in the working group did not coincide with the position of the Central Bank.
Alternative ways of controlling the industry were proposed at the conference. For example, German Neglyada, Deputy Director of Rosfinmonitoring, suggested leaving ways for cryptocurrency circulation, but establishing strict control over withdrawal of funds from digital currencies. Alexey Moiseyev insisted on strict restrictions only for unqualified investors, saying that it is too late to try to curb the crypto market completely.
Will it be possible to completely ban crypto in the Russian Federation? According to a recent study by the Russian Association of Cryptoindustry, Artificial Intelligence and Blockchain (RACIB), more than 17.3 million Russian citizens already have crypto wallets. At the same time, the amount of investment in crypto by ROSSIYA this year alone was more than $5 billion. These figures are too big to ignore or try to fight against. We believe that strict bans on cryptocurrencies in Russia will only have a negative effect in the form of a complete capital outflow “into the shadows”.
Obviously, in order to properly regulate the sphere, the authorities will have to do their best to make sure that big industry participants are not only willing to follow the rules that have been created, but also able to do so. Although the experience of other countries shows that taxation of the digital asset niche can work quite well, and quite successfully. However, new initiatives and laws are definitely needed here.
What do you think about this? Share your opinion in our Millionaires’ Crypto Chat. There we will talk about other topics related to the coin industry.
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