Hot Crypto News Today Moscow’s likely trading and mining ban is souring global crypto sentiments You Must Read To Get More Information For Trading and Investment.
It reports are to be believed, the central bank of Russia is mulling a ban on both crypto trading and mining.
“High volatility and proliferation of fraud in cryptocurrency trading creates for individuals risk of losing a significant portion of their investments and even of becoming a debtor in case of leveraged trading.”
Potential stability risks cited
Further adding that crypto-led ‘potential financial stability risks’ are higher for emerging markets like in Russia. This is because, it added,
“Due to the traditionally higher propensity for saving in foreign currency and an insufficient level of financial literacy.”
The central bank also pointed out that all major regulators are releasing warnings for consumers outlining “excessive risks inherent in investment in cryptocurrencies.” We know that several regulators have designated crypto as “speculative investments” with high risk. In addition, Moscow goes on to call cryptocurrencies financial pyramid prices which are largely driven by demand demonstrated by new market participants.
Therefore, its decision comes on the back of major risks to can negatively impact retail investors, financial stability and bring threats by the use of crypto for illicit activities. The report said,
“Just as dollarization, cryptoization limits monetary policy sovereignty, which might force central bank to permanently maintain a higher key rate in order to contain inflation.”
This further means, as per the central bank, that affordability of credit to both households and businesses is reduced.
In the light of these risks, Moscow is likely to go ahead and ban crypto as a means of payment, along with barring trading with both exchanges and peer-to-peer platforms. Moreover, all financial institutions can be barred from crypto investments. Recently, Russian lender TCS Group Holding (TCSq.L) acquired Switzerland-based crypto services firm Aximetria to expand into the space. This can affect Russian businesses who were planning to dive deep into the crypto sector.
With that, taking examples of countries like China and Iran, Russia thinks a blanket ban on mining “could be the best solution.” On the back of environmental concerns, Russia also commented in its report,
“Cryptocurrency mining creates unproductive consumption of electric power, which threatens the power supply of residential buildings, social infrastructure and enterprises and the implementation of Russia’s environmental agenda.”
Further putting pressure for more infrastructure and machinery for mining activities.
It is worth noting that according to data from the Cambridge Centre for Alternative Finance, Russia is the third-largest mining destination in the world with 11% of the global hashrate as of August 2021.
And naturally, the news of a potential ban has created negative market sentiments. At press time, BTC slipped below $40K and traded in the range of $38,000 to $40,000.
Meanwhile, the global cryptocurrency market cap today is down by 7%.
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