On Thursday, Jan. 20, Russia sent the crypto-sphere into disarray when it proposed banning digital assets in the country. Indeed, Russia’s central bank denounced crypto as being dangerous to the strength of the ruble and a threat to citizens’ wellbeing. The rumor mill immediately got to work speculating over the implications of a crypto ban in Russia, which is coincidentally the third-largest Bitcoin (CCC:BTC-USD) mining country by hash rate.
So rumors aside, what does Russia’s proposal mean for crypto investors? And is Russia banning crypto?
Functionally, the proposal may not mean not much. While there is a large crypto mining presence in Russia, its ban likely won’t reverberate outside the country. GlobalBlock analyst Marcus Sotiriou reiterated such sentiment to Markets Insider. “I think Russia banning crypto is not a big deal in the long term, as other countries, who are more accepting of digital assets, will benefit from Russia’s move.”
Sotiriou’s confidence likely stems from a comparable ban in China. Despite initial panic, last week brought the highest Bitcoin hash rate ever, reflecting indifference to China’s actions.
In terms of banning peer-to-peer crypto transfers, some believe it would amount to little more than yellow tape. Many Russian crypto owners and miners have expressed their doubt in the proposal.
One such skeptic is Russian politician Leonid Volkov, who made his views clear in a Telegram post on Thursday:
“Technically, banning cryptocurrency is the same as banning person-to-person transfers (i.e. it’s impossible)… Yes, they can make it very difficult to deposit funds on crypto exchanges, which means that intermediary services will simply appear that will do this through foreign jurisdictions. Yes, transaction costs will rise. Well, that’s all, I guess.”
The situation is far from resolved, though. With that in mind, let’s see what you need to know about Russia banning crypto.
Is Russia Banning Crypto? 6 Top Facts.
- Russia’s central bank proposed three possible amendments for crypto regulation. They are: banning crypto as a means of payment for goods, banning the issuance of crypto, and banning financial institutions from investing in the asset.
- The report claimed the boom in digital assets has created a bubble.
- The report also likens cryptocurrencies to a pyramid scheme
- In September, China issued a blanket ban on all crypto transactions and mining. Some believe Russia’s latest actions are comparable in nature.
- Some believe such a ban would hinder technological development in Russia.
- Cryptocurrencies have been down across the board in the time since the proposal’s release. While there are a number of driving forces, Russia’s crypto ban has certainly weighed on investors.
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