The Central Bank of the Russian Federation (CBRF) demanded on Thursday that cryptocurrency trading, mining, and usage be prohibited in the country because they pose a threat to the well-being and financial stability of the Russian people and the country’s economy.
According to a report issued by the central bank on Thursday, cryptocurrency exhibits all of the characteristics of a pyramid scheme and poses a danger to monetary policy autonomy. A statement from the central bank said that cryptocurrency growth posed a danger to Russia’s financial system as well as the country’s currency, the ruble.
A further statement from the bank said, “The long-term potential of using cryptocurrencies for settlements is limited, and the rapid expansion of their market value is determined by speculative demand in expectation of further exchange rate growth, which results in the formation of a bubble.”
As reported by a source, the proposal would outlaw the issuance and circulation of “cryptocurrencies, crypto-exchanges, crypto-exchangers, and P2P platforms” inside the boundaries of the Russian Federation, as well as the imposition of sanctions on those who do so.
The bank said that outlawing cryptocurrency mining was the most effective method of achieving the restriction.
In spite of the fact that Russia is one of the world’s most popular bitcoin mining locations, the country has now joined China in prohibiting the activity.
According to figures provided by Cambridge University in October, Russia has surpassed both the United States and Kazakhstan to become the world’s third-largest bitcoin mining nation, surpassing both. A projection for the year 2020 indicates that Russians will have transacted $5 billion in cryptocurrencies.
Because of a selloff in riskier assets, bitcoin prices have fallen to depths not seen since August, and they have fallen below a vital support level on Friday, according to the cryptocurrency exchange Coinbase.
Bitcoin, the most valuable cryptocurrency in the world based on market capitalization, plummeted more than 7 percent to $39,010, dropping below the important $40,000 level in a slump that began late Thursday and has continued into Friday.
On Thursday, bitcoin plummeted by $1,061.61, or 2.5 percent, to reach 40680.42.