Although cryptocurrencies like Bitcoin now much more established than it was just a few years ago, the more attention there is, the more skepticism there is – not only from the public, but also from authorities and governments. China was one of the first countries to take drastic action last summer, banning cryptocurrency transactions and mining nationwide, and subsequently shutting down countless crypto farms.
The reason for this is next to that tremendous power consumption also the Fear of losing financial control been. The Central Bank of Russia seems to have similar worries, having submitted a request a few days ago that the use and the Also ban cryptocurrency mining wool.
Reasons for the possible crypto ban
The reasons for the application for a ban are manifold: One sees cryptocurrencies as Threat to financial stability, the welfare of citizens and control over the flow of money. Another big thorn in the side of the Russian Central Bank seems to be the massive energy consumption that crypto farms are responsible for.
Because mining Bitcoin and other cryptocurrencies requires a large number of computers, all of which are incredibly powerful, the process becomes one consumes a huge amount of electricity. Electricity that the country’s citizens need for their everyday life.
To counteract these problems, the Bank believes that “The best solution is a ban on cryptocurrency mining in Russia” may be. According to Elizaveta Danilova, head of the bank’s financial security department, they want to but do not restrict ownership: “The request we made should suffice.”
If and when the proposed ban will become a reality and how that will affect the crypto market remains to be seen. China’s intervention last summer may have had an impact at home, but the international situation surrounding crypto mining actually boosted the ban.
After all, if one of the biggest competitors disappears, there will be more of the cake for the others. And since Russia, after the US and Kazakhstan, is about that, according to Reuters third largest crypto mining country acts, such a ban is likely to make waves.