The Central Bank made a proposal: to limit operations with cryptocurrency in Russia and to ban mining. Other initiatives include penalties for using digital currency for payments. Why is the Central Bank opposed?
Today, Russia is among the leaders in the mining and trading of cryptocurrency: in second place in terms of the number of transactions relative to the population and size of the economy. And this despite the current restrictions.
“In Russia today, you can’t really use cryptocurrency in any way – illegally or legally, you can’t buy anything with it, you can’t sell it to anyone, you can’t use it,” states Internet Ombudsman Dmitry Marinichev.
But investing is easy. In nine years, the value of bitcoin has increased by more than 40 thousand percent. Only the majority of digital coins are in the hands of a small number of owners, and they can manipulate the market – invite buyers to buy cryptocurrency at a high price, then artificially lower the price and buy it again bitcoin much cheaper. The jumps in its value last year reached a record 81 percent – about five times higher than in stocks. The difference can be billions of dollars. In this case, novice investors lose all the money.
“What is the risk? The risk of losing the amount of investments in cryptocurrency. Moreover, there is a risk of remaining a debtor if a citizen uses borrowed funds for his investments. The market value of cryptocurrencies does not have fundamental factors to cause growth, and this growth is largely due to a speculative factor” , – says Elizaveta Danilova, Director of the Financial Stability Department of the Central Bank of the Russian Federation.
It is impossible to determine the true value of the cryptocurrency, the price depends more on the belief in the digital currency. And the Russians are buying it in large volumes. The annual turnover of transactions is estimated at five billion dollars a year. Russian banks can now invest in digital assets, and individuals can transfer money to a crypto exchange through their account.
Ilya Tkachenko, editor-in-chief of Blockchain24.pro magazine, explains: “The Central Bank is talking about a ban on the use of the Russian banking system, Russian infrastructure for withdrawal. But, of course, there are no levers to prohibit Russian citizens from being clients of banks in other countries and using financial services in other states, the Central Bank does not have.
The Central Bank also proposed to ban mining in Russia. Our country is the third in terms of mining cryptocurrencies using the computing power of video cards. So-called “farms” consume a huge amount of electricity. For example, in the Irkutsk region, where energy tariffs are the cheapest, consumption has increased by 60 percent due to mining. There are risks that there will not be enough electricity for factories, kindergartens, schools, hospitals. For this reason, China expelled miners from the country, most of them went to Kazakhstan. Russian crypto-farmers can also move there.
The Central Bank intends to discuss all proposals together with the government and experts in order to jointly decide the fate of cryptocurrency in Russia at the legislative level. The Central Bank promised to do this in the coming months.
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