Russian Techies and Politicians Criticize Recent Crypto Ban

Russia’s central bank in a statement released on Thursday proposed the ban of crypto mining, creation, and usage. The decision received a wave of mixed reactions from Russian crypto users and enthusiasts. 

Crypto Ban and Criticism

On January 20, the Central Bank of Russia (CBR) published a report proposing a blanket ban on cryptocurrency trading, usage, and mining in the nation. The report stated that the risks associated with the use of cryptocurrencies are ‘much higher in the emerging markets, including Russia.’ 

In response to the ban, several big names in the industry have come forward opposing the proposed motion. Alexei Navalny’s chief of staff, Leonid Volkov, and Telegram founder Pavel Durov were a few names that strongly denounced the crypto ban proposal. 

The Russian entrepreneur, further indicated that the restrictive policy could hinder development in the blockchain space. Durov further added that:

“No developed country bans cryptocurrencies. Such a ban will inevitably slow down the development of blockchain technologies in general. These technologies improve the efficiency and safety of many human activities, from finance to the arts.”

The Russian central bank, on the other hand strongly believes that the proliferation of cryptocurrencies poses a threat to Russia’s financial system and the stability of the Russian ruble. 

Meanwhile, Leonid Volkov in a Telegram post stated:

“Banning cryptocurrency is the same as banning person-to-person transfers (thus impossible). They (government) 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.” 

Where Does the Move Put Cryptocurrencies?

Russia is the third nation to issue a crackdown on cryptocurrencies over the last year, following a series of mining and trading bans from China and Kazakhstan.

Russia’s move is the latest in a global cryptocurrency crackdown as governments globally fear the privately operated and highly volatile market that could pose a threat to the national fiat currencies.

Interestingly, Russia legalized cryptos in 2020 but it banned people from using them to pay for things. Now, the proposed ban aims to establish liability for violating that ban after the Russian government’s long-drawn claims that cryptocurrencies were being used to finance terrorism and money laundering.

On the other hand, Russia’s neighbor Ukraine, passed several laws to facilitate the country’s adoption of cryptocurrencies in September 2021, thereby upholding a positive narrative for the larger space. 

Following the weekend’s choppy price action and amid larger market sell-offs Bitcoin fell below $35K while Ethereum fell to $2300. At the time of writing, BTC traded at $33,741.16 noting a 5.89% price fall while Ethereum exchanged hands at $2,268.00 noting a 10.27% daily price fall. 

The global crypto market cap stood at $1.54 trillion suffering a 7.47% decrease over the last day.