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Russian President Putin Advocates for Bitcoin in Defiance of Russian Central Banks

Central banks of Russia have proposed outlawing and banning cryptocurrency and associated activities such as mining and even as payment forms. The core issue expressed by Russian central banks is stability of the nations financial system and monetary sovereignty.

This builds on previous anti-bitcoin campaigns from Russian central banks whom opposed cryptocurrency however, in 2020 Russia legalised the investment and trading of cryptocurrencies but not for use as a payment method to purchase goods and services. There was also stringent regulations surrounding the management of exchanges which needed to come under the control of the Russian central bank.

Despite the continuous push to have cryptocurrencies outlawed entirely the central banks push was lost and as of January 2021 Russians have been able to participate in the decentralised economy with the current regulations. Noting that the regulations do not prevent Russians from purchasing goods and services from foreign nations the specifics only focus on the domestic economy.

Russian Central Bank Pushes to Ban Cryptocurrency

Image Source Russia Central Bank

On 20 January 2022 the Russian Central Bank renewed advocacy to have cryptocurrencies banned including the mining of tokens on Russian soil. Their key concerns surrounded financial stability and the financing of terrorism and money laundering.

The Russian Central Bank went further to state that the speculative nature of cryptocurrencies creates a financial pyramid and financial bubbles and want cryptocurrency to fiat banned. Russia is the worlds third largest cryptocurrency mining nation and when news broke of the potential of the ban the cryptocurrency market buckled under FUD.

President Putin Defends Bitcoin

At a recent video conference with members of the Russian Government, President Vladimir Putin opened the meeting with a topic he states is currently in the national spotlight, cryptocurrencies. President Putin has called upon the Russian Central Bank to meet with his government to come to a consensus on cryptocurrencies stating the emerging technology could be of benefit to Russians.

The main advantage Russia currently has is the cost of electricity being 0.06c per Kilowatt per hour which is four times cheaper than other nations. With excess of cheap electricity and the skilled workforce President Putin wants Russia to remain in the game.

This comes after Ivan Chebeskov, Russian Finance Minister opposed the Russian Central Banks proposal to completely ban cryptocurrency stating that Russia needed to give the emerging technology time to develop.

President Putin remains undeterred and stated

“the Central Bank does not stand in our way of technical progress and is making the necessary efforts to introduce the latest technologies in this area of ​​activity.”

Certainty Should Boost the Market

With the latest announcement providing reassurance to Russian crypto enthusiasts this will no doubt reduce FUD from the previous Russian Central Bank stance and we may now see a return of the Crypto market. Time will tell what the impacts will be and what Russia will do but chances are we will likely see the continued development of digital assets and blockchain technology.

Image sources provided supplemented by Canva Pro. This is not financial advice and readers are advised to undertake their own research or seek professional financial services

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