The central bank of Russia has proposed banning cryptocurrencies because they resemble a financial pyramid. The institution has also mentioned that the extreme volatility of the value of the currencies can cause a negative impact on the citizens.
Threat to Ruble, or digital Ruble
Cryptocurrency mining is wasting an enormous amount of energy, which results in environmental damage
The central bank is also concerned about Russia’s currency; the institution takes cryptocurrencies seriously and sees them as a threat to the national currency. The country has concerns about the environmental damage that mining causes too. According to some Swedish authorities, it is possible to go 1.8 million kilometers with a medium-sized electric car with the same energy to mine a single Bitcoin. This makes Russia’s concerns about environmental damage more sensible. Cryptomining drains a lot of energy.
After China’s ban on cryptocurrency mining and transactions, Russia has the third most hashrate after USA and Kazakhstan. Some sources report that Russia might simply follow China’s steps on cryptos with a complete ban. It is also rumored that the central bank of Russia planning to ally with other countries to apply punishments for the planned prohibitions
We should note that Russia has given Bitcoin and some other cryptocurrencies a legal status back in 2020. There are also rumors about an incoming digital Ruble and the government might just be setting the ground for it.