As a reminder, the prospect of a possible cryptocurrency ban in Russia became one of the most discussed topics in January. The reason for this was the statements made by representatives of the Central Bank of the Russian Federation, who proposed to ban mining and circulation of coins using domestic infrastructure. At the same time, they did not plan to prohibit citizens from storing coins on foreign platforms like cryptocurrency exchanges.

However, a few days later, representatives of the Ministry of Finance spoke out against such an initiative. At the same time, Pavel Durov criticized the idea. He stated that such actions would only lead to an outflow of experts from the country.


What will happen to Russia after the Bitcoin ban?

Here is one of the quotes from a study by analysts, in which they shared their views on what is happening in the industry. The quote was published by the news publication Cointelegraph.

Suppose a crypto ban slows down the spread of crypto innovations that, for example, improve the speed and security of payments or the liquidity of assets through tokenisation. In this case, over time the crypto ban may weaken this aspect of the Russian banking sector’s operating environment relative to its foreign counterparts.


As a reminder, tokenisation is the process of tying the value of a particular asset to a token. This enables traders and investors to interact with tokens that will reflect the value of the underlying asset. Tokenisation simplifies access to various assets and enables significantly more participants to participate in the markets.


Fitch

Fitch also commented on the possible adoption of a central bank digital currency (CBDC) in Russia. The experts stated that “the digital ruble should enhance the authorities’ ability to monitor and manage financial flows, which could otherwise be undermined by the growth of cryptocurrency transactions.” The report also explains that the main motive for the Central Bank to propose tough restrictions on crypto could be to reduce competition with its upcoming CBDC.

In other words, experts suggest that such harsh rhetoric against digital assets could be trivial public preparation for the release of crypto from banks with a link to the national currency exchange rate. We believe that even in this case, such a strategy will not work. After all, cryptocurrencies have been around for a long time, and criticism of them is widespread among officials, bankers and even some economists without regard to the possible launch of banks' national digital currencies.

Even former Russian President Dmitry Medvedev has spoken out against such drastic measures against Bitcoin and altcoins. Here is his quote from a recent interview.

Let me put it bluntly, when they try to ban something, very often it leads to the opposite result. But of course, the Central Bank’s position has its own resonances, which are also well known to everyone.

It should be noted that the main nominal reason for banning digital assets is their volatility, that is, sharp changes in value. The authorities suggest that the deterioration of the reputation of coins and their further prohibition will allow citizens to avoid financial losses. Most likely, this will indeed have the opposite effect.

Former Russian President Dmitry Medvedev

President Vladimir Putin is likely to hold a similar position. Earlier, he asked the Central Bank and the Ministry of Finance to come to a consensus on the issue of cryptocurrency regulation. Given that there are opponents of a full cryptocurrency ban in the Finance Ministry among others, it is unlikely that it will actually be approved in the foreseeable future.


We believe that a possible ban on crypto interaction would lead to nothing. It would rather draw attention to the niche of those investors who have not yet had time to get involved with coins. Well, as more and more government officials are speaking out against such actions, it's unlikely to be seen.


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