The Russian central bank is now discussing with financial experts and market participants prohibiting cryptocurrency investments across the country. The latest move comes only days after central banks published a new rule prohibiting mutual funds from engaging in digital currency-related assets directly or indirectly.
Russia may outlaw cryptocurrency trading
According to Reuters, the bank intends to prohibit local investors from purchasing cryptocurrency assets, citing two financial market people familiar with the situation. The threat that cryptocurrencies pose to financial stability was cited as the cause. Locals may be barred from devoting fresh cash to bitcoin if the proposal is passed.
Previously, Russia‘s central bank held opposite views on cryptocurrencies, claiming that they may be used for money laundering or terrorism funding. However, later in 2020, the country authorized cryptocurrency investment but warned that it could not be used as a currency. The bank published a petition discouraging brokers from working with cryptocurrency companies despite this.
No Bitcoin ETF
In October, the governor of the Central Bank of Russia, Elvira Nabiullina, warned that the Bitcoin ETF would not be allowed into the nation. Russians trade over $5 billion in bitcoin each year, with a large number of dealers using cryptocurrency for hedging.
The prohibition of cryptocurrency might deprive local traders of this chance. The information from the sources is even more shocking given that Russia’s Deputy Finance Minister, Alexey Moiseev, stated in October that the nation had no plans to prohibit cryptocurrencies entirely, as China did.