The Bank of Russia has called for a complete ban on cryptocurrencies in Russia, stating high volatility and "proliferation of fraud" as the main reasons.
The global cryptocurrency market has grown dramatically in the last year, reaching a market capitalization of $2.3 trillion in December 2021, according to the bank.
"Owing to anonymity in transactions, money substitutes are extensively used for illegal activities." the Bank of Russia said in a statement on Thursday (20 January).
In a report presented by the central bank's director of financial stability, the call to ban crypto was made.
Despite the traditional involvement of financial intermediaries in the cryptocurrency market being currently limited, the volume of derivates and shares of ETFs related to crypto is growing, while decentralised finance ecosystems are evolving, according to the bank's report, Cryptocurrencies: Trends, Risks, and Regulation.
According to the report, there is currently no global approach to cryptocurrency regulation, and the digital asset is a grey area.
According to the bank, the amount of cryptocurrency transactions by Russian citizens has reached $5 billion per year.
"Russian individuals are active users of online cryptocurrency trading platforms. Moreover, Russia is one of the global leaders by mining capacity," it stated.
"The rapid growth of cryptocurrency market value is predominantly spurred by speculative demand and expectations of a further rise in their prices, which leads to the formation of a bubble in the market, " the bank added."
"Cryptocurrencies also have signs of a financial pyramid as increase in their prices is largely driven by demand demonstrated by new market participants."
By fLEXI tEAM