Bank of Russia’s plan to ban most crypto activities could backfire, warns Dmitry Medvedev

Bank of Russia recently proposed to ban most crypto activities including mining on Russian territory citing threats to financial stability and the country’s monetary policy sovereignty. However, the former president and prime minister of Russia Dmitry Medvedev expressed his concerns over such a course of action.

The Central Bank of the Russian Federation, also known as the Bank of Russia, is proposing to ban an array of crypto activities, such as its issuance, exchange, and mining, according to Bitcoin.com. This was revealed in the report titled “Cryptocurrencies: Trends, Risks, Measures,” published on January 20, 2022. The regulator is seeking comments and suggestions on its contents until March 1.

However, the proposal has sparked a wave of reactions from various groups. Critics even came from other branches of the government that are also working on their own roadmap for crypto regulation such as the Finance Ministry and the State Duma.

In an interview, Security Council of the Russian Federation deputy chairman Dmitry Medvedev acknowledged that the central bank has its own reasons for coming up with the proposal. However, he warned that such a strict approach could potentially backfire. “To be honest, when you try to ban something, this very often leads to the opposite result,” he said.

Meanwhile, Minister Of Digital Development Maxut Shadayev said that restricting the issuance and circulation of digital currencies could hamper the blockchain industry’s growth and is against the policy of supporting the IT sector. In addition, he pointed out that such a move could result in the outflow of qualified experts in the field.

The Russian Association for Electronic Communications (RAEC) also expressed its opposition to the proposal made by the central bank. In a statement, RAEC said that such a ban won’t solve existing fraud and other illegal activities. On the contrary, it might even complicate things as activity could move to “grey” areas.

“The ban on the circulation of cryptocurrencies will leave Russia on the sidelines of the development of one of the fastest-growing digital markets at the moment, which will significantly slow down the innovative development of the country,” RAEC said.

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