In a shocking move, Anatoly Aksakov, Russian parliamentarian and chairman of Committee on Financial Affairs in the State Duma sought a complete blanket ban on cryptocurrencies.
The reason stated by Aksakov was that cryptocurrencies (digital assets) can replace the Ruble in the Russian economy and also undermined its value. As per the minister only the Russsian Ruble fulfils the role of a monetary unit.
A bill has reportedly been introduced in the Russian parliament and would likely pass soon.
However, the bill that was introduced in the State Duma (parliament) has exceptions for crypto miners and CBDC-like projects. It is noteworthy to add that crypto miners in Russia produce $2.6 billion worth of Bitcoin every year.
The response of the Russian government has been one of the most towed lines by central banks and their respective governments worldwide.
Cryptocurrencies had played a major role in diverting the US sanctions on Russia. After its conflict in Ukraine, Russia was the target of sanctions from several governments, especially the US, EU and Japan.
Though crypto was in line to be banned by Russian authorities as early as 2018, it found some breathing space as due to the Russia-Ukraine conflict.
After its war on Ukraine, Russian banks were disenfranchised from the SWIFT monetary system.
The SWIFT is a network of interconnected banks that exchange foreign currencies for cross-border settlements. The banking network is critical for settling international transactions.
Soon, cryptocurrencies found a space to thrive in Russia. The country even became one of the largest miners of Bitcoin second to the US. By 2023, Russia increased its crypto mining capacity equivalent to 1 gigawatt of electricity.
Russian crypto markets seem to be well developed and had a user penetration as high as 22.62% by 2024. As per a report by BitKan, more people hold Ethereum than Bitcoin in Russia. Ethereum holders stand at roughly 32% followed by Bitcoin holders at 30%.
If any panic selling is witnessed, the above cryptocurrencies will be the most affected. Bitcoin has been under pressure lately, and would likely see a little correction if selling intensifies.
As of April 2024, Bitcoin has been under selling pressure which could be attributed to several factors such as geopolitical situation, bad macroeconomics, no sight of relief in interest rates, increasing inflation and several other factors.
Bitcoin had been stuck between $60,000 and $65,000 after a failed attempt to cross $70,000 in late April. As per analysts, the sideways market could extend for several coming months as Bitcoin miners get ready to sell their assets.
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