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Cryptocurrency ban in Russia: What to prepare for?

The Bank of Russia has proposed to ban the use of Russian financial infrastructure to work with digital assets. Find out how this will affect crypto investors.

The Central Bank has proposed to ban the circulation and mining of cryptocurrencies in Russia

On Thursday, January 20, the Bank of Russia published a report for public discussion, in which it proposed to ban the issuance, circulation and exchange of cryptocurrencies, as well as the organization of these operations in the territory of Russia. The regulator also considers it necessary to prohibit the mining cryptoassets and start monitoring Russian investments in cryptocurrency on trading platforms. trading abroad.

Prior to the release of the Central Bank’s report, Bloomberg, citing two knowledgeable sources, said that Bank of Russia President Elvira Nabiullina agreed to support the country’s cryptocurrency ban under the influence of the Federal Security Service (FSB). According to sources, the FSB insists on a complete ban on cryptocurrency in Russia in order to exclude the possibility of accepting donations from undesirable organizations and media, which have been included in the register of foreign agents. The Central Bank refuted this claim and indicated that the regulator initially took a skeptical stance towards cryptocurrency.

Experts explain what the prospects for cryptocurrencies are in the Russian market and what crypto investors should do.

The position of the Central Bank has been known for a long time

The possibility of the ban or the potential authorization of cryptocurrency has been discussed for several years in Russia, reminded Maria Stankevich, director of development of the crypto exchange EXMO. According to her, there are completely different opinions on the banning of cryptocurrency in Russia.

“Elvira Nabiullina’s position on this issue has been known and understandable for a long time, because for the Central Bank, cryptocurrency is just a new issue and nothing more”, announced the expert.

Previously, Central Bank President Elvira Nabiullina said the regulator was extremely negative towards private cryptocurrencies pretending to be money. According to her, the problem is that digital currencies are anonymous and no one is responsible for them. The President of the Bank of Russia has repeatedly criticized cryptocurrencies, calling them a “money substitute”, and also recommended Russians not to invest in digital assets.

“The vision of the Central Bank is only the vision of the Central Bank, it must be understood that it is only one side of the great state apparatus”, says the expert.

Despite the regulator’s hostile attitude toward cryptocurrencies, Stankevich expressed confidence that Russia would not follow China’s path of a full cryptocurrency ban. By way of argument, she recalled that cryptoassets were already recognized as property and were taxable, in accordance with the law. “on digital financial assets”, coming into force at the beginning of 2021.

“Now the complete abandonment of digital assets will at least seem illogical”, Stankevich noted.

Central Bank capacity is limited

Now the chain is under the control of the Bank of Russia, said Eduard Davydov, partner of the international law firm NOA Circle. According to him, it is not possible to limit the turnover of cryptocurrency in Russia.

“Acquiring new tokens or currencies in the classic and most popular way, through card payment, will become impossible or difficult”, explained the expert.

Davydov recalled that the issue of blocking crypto exchanges by the MCC codes that payment systems assigned to each organization had already been raised. Thus, banks can determine which services relate to which payments, the expert pointed out. He added that it would be more difficult to limit p2p transactions (between natural persons), because it would be difficult to determine the nature of these transfers.

“The bank does not know if you repaid the loan to your friend or transferred funds as a cryptocurrency payment. But I think the Central Bank will force banks to collect information on specific individuals, spotted in cryptocurrency trafficking, and put them on the ” blacklist ” , subsequently limiting access to financial services”, suggested Davydov.

On January 19, it became known that the Bank of Russia began to study the operations of Russian banks linked to crypto exchanges. At the end of last year, the Central Bank sent requests to banks to work with crypto exchanges regarding payments between citizens.

The process of a complete ban on crypto operations is not a quick procedure, stressed Dmitry Galushko, managing director of the law firm “OrderKom”. The regulator started it last year, so in 2022 there is a high probability of introducing restrictions on cryptocurrency, he believes. Galushko also recalled the initiative of the Central Bank for the issuance of the digital ruble. In his view, banning cryptocurrency and issuing national digital currency are interrelated things.

The digital ruble is an additional form of Russian national currency that will be issued by the Bank of Russia. It combines the properties of cash and bank money. In 2022, the regulator plans to conduct the first test phase of the digital ruble, in which credit institutions and C2C operations will be connected (Consumer-to-Consumer, consumer-to-consumer interaction).

How will this affect crypto investors?

The Central Bank’s initiatives on cryptocurrency are taking legislative form, but this process could take three months to a year, according to Eduard Davydov. He also shared that, judging by the Central Bank’s statement, the regulator will not limit the ability of Russians to buy cryptocurrencies on trading platforms. trading foreign.

“Things are more difficult for minors, it seems that we are on the verge of a new migration, after what happened in China”, Davydov added.

Davydov recommended considering the option of selling cryptoassets and withdrawing funds from crypto exchanges to short-term investors who may need the cash in the coming months. Long-term investors have no reason to worry about the Central Bank’s statement, the expert believes. He added that such investors will always be able to travel outside of Russia and realize their assets in the territory of other states, without violating Russian legislation.

Cryptocurrencies were invented just to circumvent various restrictions and prohibitions, Sergey Mendeleyev, executive director of crypto company InDeFi Smart Bank, reminded. In accordance with his opinion, no restriction is capable of destroying the cryptocurrency market, but it is capable of freeing it from new and inexperienced participants who entered the industry last year. In this regard, Mendeleyev is convinced that there are no preconditions for panic at the present time.

Today, many experts speak out about the ban on cryptocurrency in Russia. We will see which opinions turn out to be correct. However, we suggest that you stay on Cointribune so that you don’t miss any news regarding the evolution of the situation in the crypto market!

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Source: Cointribune

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