The Russian Central bank has proposed a ban on the use and mining of cryptocurrencies in its jurisdiction, saying it “threatens financial stability and the sovereignty of monetary policies”.
The Central bank report notes that the speculative nature of the asset class resembles a “pyramid scheme” that could cause financial shocks in case of a bubble.
The proposal also wants institutions, including exchanges, to be blocked from undertaking cryptocurrencies operations like crypto-fiat exchange.
The bank proposes a rule out on cryptocurrency mining, citing inefficient energy consumption that is often obtained from fossil fuel.
The institution reveals in the report that the Russians are active crypto users with around $5 billion in annual transaction volume.
The Putin-led administration has been against cryptocurrencies for long, citing terrorism financing and money laundering concerns.
Russia is the third-largest bitcoin mining destination globally, behind the US and Kazakhstan, with the latter having been affected by a series of political unrest.
The country gave crypto a legal status in 2020 but barred its payment for goods and services. BTC plunged in December on reports that Russia was contemplating a total ban on digital assets.