Bank of Russia Supports Ban on Crypto as Payment Method

Bank of Russia Supports Ban on Crypto as Payment Method

The Bank of Russia supports a ban on cryptocurrency payments. The Bank says that “private cryptocurrencies cannot be equated with fiat money and cannot be legal tender.”

It added: “If it is decided to ban cryptocurrencies as a means of payment at the legislative level, we consider it appropriate to support this position.”

The bank is worried about bitcoin being used for criminal activity. “We continue to believe that cryptocurrencies carry significant risks, including in the field of laundering of proceeds from crime and financing of terrorism, as well as in conducting exchange transactions due to sharp exchange rate fluctuations.”

The bank’s chairman, Elvira Nabiullina, said the decision to support a ban on cryptocurrency stems from market volatility and cybercrime.

“The ruble is the only legal tender in the Russian Federation,” she said. “We continue to believe that cryptocurrencies carry significant risks, including in the field of laundering of proceeds from crime and financing of terrorism, as well as in conducting exchange transactions due to sharp exchange rate fluctuations.”

She added: “Nabiullina to suggest cryptocurrency is akin to gambling in a casino. In our opinion, private cryptocurrencies cannot be equated with fiat money and cannot be legal tender.”

Russian president Vladimir Putin has been a proponent of cryptocurrency regulations. Earlier this year, the Russian Ministry of Finance introduced a law to criminalize the use of cryptocurrencies as money substitutes.

At the time, Nabiullina said she and Russian Finance Ministry oppose the use of cryptocurrency “as private money surrogates.”

She said: “There is the ruble, and everything else is a surrogate.”

It’s not clear what the penalties will be for breaking this law. “The consequences of the violation of this principle have not been reflected anywhere for many years. The Finance Ministry decided to fill this gap,” said Alexei Moiseev, Russia’s deputy finance minister.

President Putin has said: “If we regulate, but not efficiently enough, then the government will be responsible for the difficult situations that people can get into. Right now it is the responsibility of the person himself, and the government can only say, ‘you can do this but you can’t do that.’ And if it’s still not clear, then there will be some problems that need to be solved.”