Russia in talks with experts over ban on crypto investments

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Russia has become the latest country considering a possible ban on crypto investments, a Reuters report says. Head of the State Duma’s Committee on the Financial Markets Anatoly Aksakov says the authorities are still in talks on whether to regulate or ban cryptocurrencies completely.

This is coming at a time when cryptocurrency are seeing rising popularity in the country. Financial regulators already banned crypto as a means of payment, but allowed its citizens to hold it as an investment until now.

If the government ends up placing a ban on crypto investments, it will be illegal to invest in or hold any cryptocurrency in the country. Russia had in the past expressed concerns over the illegal use of cryptocurrencies such as money laundering. The reason for the proposed ban however is that cryptocurrencies could lead to financial instability.

Russia follows in China’s path

Several countries have expressed concerns over the use of cryptocurrencies. However, very few have declared outright bans on the asset class, foremost among is China. Chinese authorities recently banned Bitcoin mining activities in the country, forcing miners to flee to other countries such as the United States.

Russia will be one of the early countries to take such a drastic step if it goes through with an outright ban on digital assets instead of regulating the sector. The ban seems imminent though, as a source close to the central bank said the bank is inclined towards total rejection of all cryptocurrencies.

CBDC instead of Crypto

While Russia has been critical of decentralized cryptocurrencies, the government has been pursuing a central bank digital currency (CBDC) vigorously. It launched a digital Ruble trial with 12 banks in June this year, making it also one of the countries with an ambition to launch a digital version of their national currency.

Like China, Russia may be planning to replace cryptocurrencies with its own centralized digital currency which will be controlled mainly by the central government.

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