Bank of Russia calls for an outright ban on cryptocurrencies

The Bank of Russia is looking to ban the mining, creation, and use of cryptocurrencies. A report unveiled this news earlier today, noting that the central bank believes the proliferation of cryptocurrencies threatens Russia’s financial system and the ruble’s stability.

Per the bank, this ban would help minimize these threats and protect the general public against the risks associated with crypto. According to the central bank,

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The status of the Russian ruble, which is not a reserve currency, makes it impossible to apply a soft approach in Russia and ignore the growth of risks. In our opinion, additional measures are appropriate.

The Bank of Russia further cited environmental concerns as part of its reason to ban cryptocurrencies. The country, which provides over 10% of BTC’s hashrate moves to immediately halt crypto mining within its jurisdiction.

The ban proposal also suggests outlawing financial institutions from handling any transfers of digital assets. While the central bank currently prohibits Russians from using cryptocurrencies to purchase goods and services, the country’s citizens will not be able to buy Bitcoin (BTC/USD) if this proposal goes through.

Vladamir Putin’s stance on crypto remains unclear

While the Bank of Russia believes banning cryptocurrencies would be beneficial for Russia, it would be hard for this proposal to sail through without the approval of Vladamir Putin. Putin, who has been Russia’s President for 18 years has withheld airing his outlook on crypto over the years as he tries to figure out the geopolitical implications.

On top of this, many crypto advocates believe decentralized networks are almost immune to bans, seeing as it is hard to regulate the access and use of assets that are fundamentally open-source computer programs.

While crypto enthusiasts believe cryptos cannot be censored, it is worth noting that multiple countries have already banned cryptocurrencies. According to the Law Library of Congress, nine countries have explicitly banned cryptos. These are Algeria, Bangladesh, Egypt, Iraq, Morocco, Nepal, Qatar, Tunisia and, China. 

Apart from China and Nepal, the above countries have large Muslim majorities, a common feature that has opened a debate on whether Islamic law approves of cryptocurrencies. At the moment, the issue is contentious, seeing as some clerics have declared crypto haram (illegal) while others claim it is legal (haram).

While these countries have banned cryptos, there is still some crypto activity in their jurisdictions data from the Cambridge Center for Alternative Finance found that over 0.19% of BTC’s hashrate comes from the above counties, meaning that it is impossible to fully ban cryptocurrencies.