The Russian Central Bank Is Considering A Ban on Public Cryptocurrencies Like Bitcoin

On November 29, the central bank of the Russian Federation has put forward a proposal to ban public cryptocurrencies like Bitcoin and other crypto payments.

The central bank said that cryptocurrencies like Bitcoin are highly volatile and risky in nature. Thus, they are considering to put a blanket ban on cryptocurrency payments and purchases.

Speaking to the state-owned Russian news agency RIA Novosti, the central bank chairman Elvira Nabiullina said: “The ruble is the only legal tender in the Russian Federation. We continue to believe that cryptocurrencies carry significant risks, including in the field of laundering of proceeds from crime and financing of terrorism, as well as in conducting exchange transactions due to sharp exchange rate fluctuations.”

Over the last few years, Russia has remained uncertain about the state of cryptocurrencies in the country. At one point in time, Russia was also considering to boost crypto adoption to circumvent any sanctions coming from the Western countries.

However, since the last summer, proper legislation confirming the legal status of digital currencies was missing. Now, it seems like the State Duma has decided to act upon it. Thus, besides cryptocurrencies, other crypto-related activities like ICOs and crypto mining will get a legal status very soon.

Nabiullina further added that "private cryptocurrencies cannot be equated with fiat money and cannot be legal tender.If it is decided to ban cryptocurrencies as a means of payment at the legislative level, we consider it appropriate to support this position”.

Supporting the legislators, the Bank of Russia said: "We continue to believe that cryptocurrencies carry significant risks, including in the field of laundering of proceeds from crime and financing of terrorism, as well as in conducting exchange transactions due to sharp exchange rate fluctuations."

However, the central bank - Bank of Russia - has shown its interest in stablecoins. The country is currently studying the benefits of having a central bank digital currency (CBDC) and how other big economies are planning for it.

With this ban on Bitcoin and its peers, Russia will be joining other major Asian economies like China and India in banning cryptocurrencies.

Last month in November, a report from BBC surfaced that Russia’s FSB intelligence agency was allegedly involved in the disappearance of $450 million worth of digital assets from the Wex crypto exchange. The exchange went out of business last year in 2018 after several user wallets were frozen.