The Bank of Russia proposed slapping a ban on mining, issuing, circulating, and exchanging cryptocurrencies, including bitcoin, by any Russian players, crypto exchanges, crypto exchanges, and P2P platforms in Russia. The regulator agrees only to allow citizens to own cryptocurrency, but not to buy it from any Russian infrastructure. Experts told Vedomosti that a complete ban on operations with cryptocurrencies is not the best option to deal with any possible problems. The Bank of Russia wants to ban all financial institutions, banks or, for example, brokers from being intermediaries and providing their infrastructure for carrying out any operations with cryptocurrency. Financial institutions will not be able to invest in cryptocurrencies. The regulator believes that not only does direct ownership of cryptocurrencies but also investing in its derivative financial instruments hold risks. Tight regulation will only apply to cryptocurrencies, but not assets such as NFTs. The regulator proposed introducing fines for all these violations. So far, there are no specifics in the report of the Bank of Russia for public consultations.
The ban on cryptocurrencies in Russia means lost profits for the country's budget, CEO of ANO Digital Platforms Arseniy Shcheltsin told the newspaper. In addition, it would limit the development of Russian projects in this area and provide a signal to developers and professional users not to conduct business related to cryptocurrencies in Russia. The prohibition would not be appropriate either for investors or for the state, attorney at Criminal Defense Firm Daniil Gorky says. Imposing bans can lead to investors losing their crypto-currency assets, while Russia already today ranks third in the world in terms of cryptocurrency mining. KPMG Law Partner Olga Yasko believes that the risks named by the Bank of Russia are real, but it would be more effective to manage them through control mechanisms. The annual volume of operations involving cryptocurrency among Russians, according to the Central Bank, reaches around $5 bln, thereby demonstrating that Russians are one of the most active players on this market.
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