The Central Bank of Russia is talking to financial market leaders and industry experts about a potential ban on cryptocurrency investment to stem the tide of financial instability with increased use of digital currency, according to a Reuters report Thursday (Dec. 16).
One unnamed source expects the ban to apply only to new cryptocurrency purchases, but another source sees the Russian central bank as ready to enforce a “complete rejection” of all cryptocurrencies.
The Bank of Russia said it’s preparing an advisory report on the issue, but gave no specifics.
The increasing popularity of cryptocurrencies “has raised concerns about financial stability,” according to Central Bank First Deputy Governor Ksenia Yudaeva. Crypto transactions across Russia reached about $5 billion for the last year, according to the central bank.
Russian leaders have long warned about the use of digital assets for money laundering or financial terrorism. In 2020, Russia made cryptos legal tender, but banned them from being used as a means of payment.
China declared all cryptocurrency transactions illegal in September as part of its countrywide crackdown on the technology sector. Cryptocurrency, meanwhile, grew to about $3 trillion in valuation earlier this year before dipping to about $2.3 trillion.
Related: China Pilots Connection Between Digital Yuan and Hong Kong Fast Payment System
While China has banned cryptocurrency, its financial leaders are instead trying to connect its nearly finished central bank digital currency (CBDC) to Hong Kong’s Fast Payment System.
The pilot program between the People’s Bank of China (PBoC) and the Hong Kong Monetary Authority (HKMA) was announced by the head of China’s digital yuan project last week. China’s CBDC project is expected to launch by February.
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