RUSSIA is about to issue a total ban on all trade and mining of cryptocurrencies – it will essentially freeze digital assets worth $ 92 billion.
The Moscow Central Bank has proposed a blanket ban on the use and creation of all cryptocurrencies within Russia’s borders.
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Russia is the third largest cryptocurrency country in the world – and currently has $ 92 billion in assets in 17 million cryptocurrencies.
Vladimir Putin’s security services allegedly complained that they considered the cryptocurrency a problem.
In a new report, Russia’s central bank said it considered the cryptocurrency to be “bearing the hallmarks of a pyramid scheme.”
And he warned bankers that cryptocurrencies posed a “threat to Russia’s financial system” and undermined the country’s economic sovereignty.
The central bank insisted that it would not ban cryptocurrency for citizens – but digital cash transactions would be banned.
It is not clear how much impact this will have on the already struggling and highly volatile crypto markets.
Bitcoin – the largest cryptocurrency in the world – fell 35.2 percent from its record high.
However, there were signs of recovery as it peaked above $ 40,000 per coin at the beginning of the week.
Extreme volatility and sudden market downturns are one of the reasons why investing in cryptocurrencies is very risky.
You should never invest in something you do not understand and make sure you do not invest money that you cannot afford to lose.
Putin’s central bank also claimed that cryptocurrency mining – which sees computer systems running to solve math problems to obtain coins – is damaging the country’s “green agenda.”
“The potential financial stability risks associated with cryptocurrencies are much higher for emerging markets, including Russia,” the Bank of Russia report said.
“This is due to the traditionally higher tendency to save in foreign currency and the insufficient level of financial literacy.”
The price of bitcoin collapsed earlier this year after Russia’s Russian neighbor cut off the internet amid a wave of unrest.
Kazakhstan – the second largest bitcoin mining center in the United States – accounted for 17 percent of global bitcoin output.
It is likely that the proposed ban on mining and trade in Russia will affect the value of cryptocurrencies.
KRYPTO CHAOS
Russia’s Federal Security Service (FSB) has lobbied for a blanket ban on cryptocurrencies as they are increasingly used by opposition groups and unwanted media, Bloomberg said.
However, Elizaveta Danilova, the bank’s director, insisted that the new intervention was not a total ban on cryptocurrency ownership.
“We note that we are not proposing a ban on citizens owning cryptocurrencies,” she said.
Last year, according to Cambridge University, Russia became the world’s third largest cryptocurrency miner.
Crypto mines exist in the north of the country and in Siberia, where temperatures are low and energy is cheap.
And this week, Vyacheslav Volodin, chairman of the lower house of the Russian parliament, said a regulatory plan for cryptocurrencies would be drawn up.
Putin’s biggest rival, Alexei Navalny, accepted cryptocurrency donations, with his office holding up to $ 4 million in bitcoins.
And Medusa’s news website, which was labeled a “foreign agent,” also received cash in the form of cryptocurrencies.
In the meantime, it comes because its dreaded Russia may be on the verge of invading its neighbor, Ukraine.
It would be a move that would likely shake markets and potentially trigger a major war in Eastern Europe.
Risks of buying with cryptocurrencies
Investing and buying in cryptocurrencies such as bitcoin is risky.
Their value is highly volatile and the City watchdog, the Financial Conduct Authority, has warned investors that they should be prepared to lose all their money.
Investing in cryptocurrencies is not a guaranteed way to make money.
You should also think twice about cryptocurrency shopping.
For example, bitcoin has had wild price fluctuations in recent months and the price can change almost every hour.
According to Coindesk, the price of bitcoin was $ 40,258 on January 9, but only three days later it dropped to $ 34,214.
That’s a 15% drop.
These price fluctuations are risky for the company because you could sell the item for bitcoin at one price and the value may drop soon after, so you will have less money from the sale.
Similarly, the price of bitcoin has skyrocketed by more than 21% since the beginning of this week, so it can be difficult for a shopper to get an accurate idea of an item’s price if its value changes daily.
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