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The Bank of Russia is increasingly promoting a tough stance on digital assets. Experts told how likely the scenario of a complete ban on cryptocurrencies in the country is
In December, the Central Bank spoke several times about plans to limit Russian investments in cryptocurrencies. For example, last week the Bank of Russia promised to publish a report in the near future that would describe its own vision of regulating digital assets in the country.
“I give a hint – we do not see a place for cryptocurrency in the Russian financial market,” said then Deputy Chairman of the Central Bank Vladimir Chistyukhin.
Not long before this, information appeared in the media that the regulator sees risks for the financial stability of the Russian Federation in the growth of the number of crypto transactions and plans to prohibit investments in cryptocurrencies. If the ban is approved by lawmakers, it will apply to new cryptocurrency purchases, but not digital assets purchased in the past. The current position of the regulator is a complete rejection of cryptocurrencies.
At the same time, the discussion of a possible ban on digital assets was also confirmed in the State Duma. The head of the financial market committee Anatoly Aksakov said that the authorities are discussing two opposite approaches to regulation, and they should decide on this issue in 2022.
Depth of prohibition
InDeFi Smart Bank Executive Director Sergei Mendeleev claims that the scenario of banning cryptocurrencies has already been launched and will be implemented in the spring. The only question is how deep this prohibition will be.
“If the business is limited to blocking payments from credit cards, then no one will even notice. But if criminal liability is introduced for the possession or operations with cryptocurrency (a similar draft amendment to the Criminal Code was already introduced in the summer of 2020, but then it was quickly removed from the agenda), then this, of course, will have disastrous consequences, “Mendeleev noted.
According to him, after the entry into force of the law on digital financial assets, the authorities planned to see how it would work, and then make further decisions. However, due to the position of the Central Bank, which never registered a single operator of the CFA sites, the law did not work. And Elvira Nabiullina’s department is currently the main driver of prohibitive initiatives.
Who will get hurt?
The scenario of a cryptocurrency ban in Russia is quite realistic, says Nikita Zuborev, senior analyst at Bestchange.ru. According to him, there has long been a tendency for lobbyists from the Central Bank to displace any digital assets, except for the digital ruble. If they continue this trend, then 2022 could be the last free year for cryptocurrencies in Russia.
“A complete ban on cryptocurrencies is actually a” shot in the foot “by the state – this will force the exchange business to go into the shadows, move to other jurisdictions, that is, we will lose tax deductions,” Zuborev said.
At the same time, according to the expert, crypto exchangers will continue to work, but services may rise in price due to new risks and additional costs. At the same time, exchanges are likely to prohibit only direct exchange through banking in rubles, but payment systems and p2p gateways for deposits and withdrawals will remain.
“The worst will be for miners, it is difficult for them to hide equipment, as well as transporting small farms will be simply unprofitable. It is possible for a small part of the owners of crypto farms to emigrate to Ukraine or Georgia, but the majority will be forced to sell their equipment for almost half the price and stop operating, ”the specialist predicted.
Banning technology means losing all staff in this area, both entrepreneurs and developers-programmers, as well as financiers, not forgetting about just talented and “drive” entrepreneurs, added the executive director of InDeFi Smart Bank. This also means a loss of investment, including from leading international funds, which will have an extremely negative impact on the country’s economy, Mendeleev said. He noted that all this, in turn, will lead to a further outflow of young and talented people from the country, not even related to cryptocurrency.
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