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    Russian Authorities Allow For A Complete Ban On Crypto

    Russia to ban crypto

    The Central Bank of the Russian Federation sees risks to financial stability in cryptocurrencies and deems it possible to completely prohibit any cryptocurrency investments. The Reuters news agency writes about this, citing sources close to the bank.

    It is known that the leadership of the Bank of Russia is categorically against the recognition of cryptocurrencies as legal payment instruments The head of the Central Bank Elvira Nabiullina has publicly taken the toughest position on more than one occasion, calling Bitcoin a “fraud and a financial pyramid”.

    The Bank of Russia regularly draws public attention to the high risks of use of cryptocurrencies. According to the bank, "operations with cryptocurrencies carry the risks of financial losses (both due to sharp fluctuations in the exchange rate and in the case of attracting funding through ICOs), and the risk of involvement in illegal activities, including money laundering and terrorist financing."

    Many large Russian banks are directly or indirectly involved in digital currency transactions. In the recent Financial Stability Review, the Bank of Russia indicated that the volume of transactions of Russian citizens with cryptocurrencies annually reaches $ 5 billion. According to the University of Cambridge, in 2021 Russia became the third largest Bitcoin mining country in the world. The share of Russia was 11.2% of the world's mined coins.

    In 2020, cryptocurrencies received legal status in Russia, but their use as a means of payment is prohibited. On December 16, Anatoly Aksakov, chairman of the Russian parliament's committee on the financial market, told the media that now the Russian authorities are discussing two diametrically opposed approaches to the regulation of cryptocurrencies in Russia: from a complete ban to the legalization of cryptocurrency exchanges. 

    The central bank insists on an unconditional ban and "complete rejection" of the cryptocurrency industry. If lawmakers approve this approach, then prohibition will only apply to new purchases of cryptocurrencies, not those that were made before the ban came into force.

    However, supporters of a more liberal approach, as Aksakov explained on December 16, believe that "there should be appropriate crypto exchanges… exchanges should be legalized in order for everything to be transparent, understandable to regulatory bodies, and it would be easier for the Federal Tax Service to tax these transactions."

    In February of this year, the State Duma of the Russian Federation adopted a draft law on the taxation of transactions with cryptocurrencies in the first reading, despite criticism. Since then, the document has not been finalized.

    The term "cryptocurrency" is included in the law "On digital financial assets", which came into force in January. It prohibits the use of cryptos for payment but does not regulate mining. In November, the State Duma announced the preparation of a draft law on mining regulation and created a working group for discussion. Representatives of several ministries supported the idea of ​​equating cryptocurrency mining with entrepreneurship.

    In December, the Federation Council announced the formation of a working group to develop further regulation of cryptocurrencies. The Ministry of Finance of the Russian Federation expressed the hope that the issue of regulating the industry will be resolved in 2022.

    The content of this article is for informational purposes only and should not be construed as investment advice. We ask you to do your research. This text is not a guide to action. The author's opinion may not coincide with the opinion of CoinJoy.