- Reports about Russia’s coming crypto ban are bringing more FUD (Fear, Uncertainty, Doubt) to the market.
- This comes following the confirmation of a key Russian official that Bitcoin (BTC) and other cryptos operating outside the proposed law will be prohibited.
Russia’s Incoming Ban on Crypto
There’s troubling news right now about an impending blanket ban on cryptocurrencies in Russia similar to China’s. This comes following the statements of Chairman of the State Duma Committee on the Financial Market Anatoly Aksakov to the country’s National News Service (NSN).
According to the loose translation of the report via Google Translate, Aksakov and his colleagues at the lower house of parliament in Russia reintroduced a bill to regulate crypto mining activities and prohibit the circulation of digital currencies. The proposed law aims to enforce the restrictions on September 1 this year.
However, the proposal places exceptions for crypto mining projects, mining pools, and other related test projects authorized by the Central Bank of Russia. Aksakov confirmed that a decision has already been made regarding the matter.
The prohibition will unfortunately include the leading cryptocurrency by market cap, Bitcoin, which just underwent its fourth halving this month. For the official, the digital asset is but a quasi-currency that undermines the Russian ruble. Given that distinction, it does not fulfill the definition of a monetary unit similar to the ruble.
“We are talking about a ban on transactions with bitcoins and other cryptocurrencies,” said Aksakov. “Digital financial assets issued in Russian jurisdiction, digital rubles, will be allowed.”
“The need for a ban is due to the fact that today cryptocurrency is a quasi-currency that replaces the ruble in the country,” he added. “But only the Russian ruble fulfills the mission of a monetary unit, which is why this decision was made.”
“From September 1, the ban will be introduced,” the State Duma authority figure declared.
As the alarm bells are ringing, Deputy Chairman of the State Duma Committee on Information Technologies and Communications Policy Anton Gorelkin threw in his hat over the subject. He criticized news outlets for their clickbaity headlines in a lengthy Telegram post, which was also translated using the app.
“It’s surprising that even some respected publications wrote that ‘deputies want to ban the circulation of cryptocurrencies in Russia,’” he commented.
Gorelkin cleared out the misconceptions raised following Aksakov’s pronouncements. He emphasized the exemptions mentioned by his colleague that it does not ban all crypto. It’s for this reason that the same bill discusses what should be qualified as crypto transactions of a criminal nature.
“Why then, by the same bill, introduce mechanisms for identifying cryptocurrency transactions of a criminal nature, if everything will be considered illegal?” Gorelkin questioned.
The official explained that if all cryptos are deemed illegal by default, there should no longer be a need to provide such distinctions. He went on to say that the circulation of cryptos will not be prohibited if they are operating within the ambit of the new law.
“Of course, the circulation of cryptocurrencies will not be prohibited,” he posted. “The organization of circulation is prohibited—that is, the creation of exchanges and exchangers outside the zone of operation of the experimental legal regime.”
FUD Affecting the Market
Due to the circulating reports on Russia’s blanket ban on crypto, the FUD factory comes in full swing as the market braces itself for a crash in Bitcoin and altcoin prices.
In light of the report, Bitcoin slumped at a one-week low below $62K within the 24-hour frame as of this writing at 5:00 PM UTC on Monday before settling around $62,800. The same price movement was also mirrored by altcoins that tend to ride on the prime cryptocurrency’s coattails.
Amid fears of a crash similar to the fallout of China’s ban on crypto, analysts are downplaying the situation in Russia, and it’s for a good reason. First off, the 2021 ban was hammered back when many crypto-mining firms were operating in China. The sudden exit of these players in the market halted many Bitcoin mining operations there, which eventually took a toll on the market.
In contrast to this is Russia, which does not have the same concentration levels of crypto mining activities. Furthermore, the nation led by President Vladimir Putin, does not plan on banning all cryptocurrencies and other related projects as Aksakov and Gorelkin pointed out.