Moscow’s likely trading and mining ban is souring global crypto sentiments

ambcrypto.com:

It reports are to be believed, the central bank of Russia is mulling a ban on both crypto trading and mining.

As per the recently released consultation paper, Moscow has outlined the risks associated with the sector. It stated,

“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.”

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