Crypto’s slew of recent crackdowns on its use and mining worldwide, Russia’s central bank announced on Thursday that the country should take similar action.
In a paper released the same day, the central bank noted that speculative demand was primarily responsible for cryptocurrencies’ rapid growth. Similarly, they exhibited characteristics of a financial pyramid, warning of potential market bubbles that might jeopardize financial stability and citizens.
The central bank, which plans to launch its virtual ruble, claims that the widespread adoption of crypto assets will constrain monetary legislative autonomy. Again, requiring a higher percentage of interest to keep inflation under control.
Above all, governments from Asia to the United States have raised concern that individually run and extremely unstable cryptocurrencies could jeopardize their command over economic and monetary networks.
For years, Russia has argued against digital currencies. Terrorists and money launderers can benefit from one other’s activities. As a result, the bank recommended prohibiting financial firms from participating in cryptocurrency transactions. Preventing the exchange of digital currency for fiat cash should be a top priority for any company that handles digital currency.
Crypto exchanges are included in the suggested prohibition. Binance, a cryptocurrency exchange, told Reuters that it was dedicated to cooperating with authorities. Moreover, they hoped that the study’s publication would spark a conversation with the Russian central bank. It will concentrate on looking out for the interests of crypto consumers.
According to Elizaveta Danilova, no restrictions on cryptocurrency ownership are in the works, head of the central bank’s financial stability branch.
According to the bank, engaged cryptocurrency consumers in Russia trade for roughly $5 billion each year. Moreover, the central bank stated that it would collaborate with authorities in nations. Similarly, data collection by bitcoin exchanges on Russian customers’ transactions has the opposite effect. According to the report, other countries, including China, have taken measures to curtail crypto activities.
In September of last year, China outlawed digital currencies. It also blocked the establishment of new mining operations in the nation.
At this time, there are no attempts to outlaw cryptocurrencies in the same way that China has, Danilova added. The strategy they have presented will be sufficient.
After the United States and Kazakhstan, Russia is the world’s third-largest bitcoin mining country. According to the Bank of Russia, Crypto mining is causing concerns with energy use. The Digital currencies are “mined”. Similarly, supercomputers are the ones competing to solve complicated mathematical puzzles.
It’s a global competition against others who share the same network. The process consumes a great deal of electricity. Additionally, fossil fuels run frequently. The bank stated that the best option is to restrict crypto mining in Russia.
In August, Russia generated approximately 11.2 percent of the total world hash rate. Finally, the computational power employed by computers linked to the bitcoin system.
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