This Thursday came as a shock to the already cracked crypto world as the Bank of Russia brought up its suggestion for the country to ban Bitcoin mining and trading and other cryptocurrency exchanges on Russian territory as to take effect in 2022. Russia is the third to consider banning Bitcoin and cryptosystems over the last year, right after Kazakhstan and China.
According to Cambridge University statistics, Russia is the third-biggest crypto mining region, since the low temperatures in the Northern regions and Siberia result in cheaper power supply. Although the legalization of Bitcoin and other crypto chains has been long discussed and argued over, they were given legality to some extent in 2020 because of their rising popularity.
The Bank of Russia has been even more skeptical of BTC and crypto tokens and has hinted at further ban regulations last December. And on Thursday, January 20th, the bank propositioned a ban on Bitcoin and the crypto market. The bank statements argue that Bitcoin and crypto mining are a threat to the financial system of Russia, the energy supply, and the eco-system. Bitcoins are mined by the use of powerful fossil fuels and computers resulting in intense consumption of electricity.
‘The best solution is to introduce a ban on cryptocurrency mining in Russia’ the Russian central bank stated.
‘For now there are no plans to ban cryptocurrencies similar to the experience of China’ – commented Elizaveta Danilova, director of the regulator’s in the FSC. ‘The approach we have proposed will suffice.’
Unlike China, the Russian bank suggests banning the trading exchange, mining, and usage of Bitcoin and other cryptocurrencies on the territory of Russia, while still allowing owning BTC at offshore bank accounts for crypto storing and crypto trading.
Still, the proposition is being discussed. After September’s crack to the crypto market by the full-on crypto ban in China, Bitcoin dropped below $44,000 in January.
‘Russia has been a top three country for Bitcoin mining, so if this proposal passes, Bitcoin could slide below the $40,000 level’ – is what prognoses the analyst broker at Oanda, Edward Moya.
After the release of the news of Russia potentially banning Bitcoin in its territory, the BTC price lowered by around 7% over 24 hours to around $39,000.