Russia’s central bank has come out in support of government efforts to block access to cryptocurrency websites, as authorities continue to find new ways of clamping down on digital currencies.
Sergei Shvetsov, the bank’s first deputy governor, said that the bank will stand fully behind attempts to ban Russian citizens from accessing cryptocurrency exchanges and services, citing the “unreasonably high risks” involved for investors.
As a result, the Bank of Russia is preparing to work closely with the country’s judiciary to close down websites offering cryptocurrency exchange and investment services, encapsulating “all cryptocurrency derivatives” in the process.
The move will be seen as a disappointment for investors in the space, but not a surprise, given the hardline approach adopted on digital currencies by the Russian authorities to date.
Speaking to local press, Shvetsov outlined further the bank’s rationale in taking these measures.
“We consider all cryptocurrency derivatives to be a negative development on the Russian market and do not consider it possible to support it, and will even assume measures to restrict potential operations with such instruments made by the regulated part of the Russian market. Meanwhile, we assume efforts aimed at closing external websites that allow Russian citizens to acquire such assets together with the General Prosecutor’s Office.”
He went further, labeling bitcoin a potential “pyramid scheme,” based on the potential for high earnings over a short period of time.
The move comes following a number of increasing warnings from Russian authorities over the risks and dangers of bitcoin and other digital currency investments, and could come into force sooner rather than later.
It follows from similar warnings, including from deputy finance minister Alexey Moiseev, who said earlier in September that upcoming laws would introduce an outright ban on cryptocurrency payments.
This echoes comments from a few weeks earlier, where the Bank of Russia’s deputy governor told Bloomberg the bank felt sympathies with the Chinese position: “China doesn’t recognize cryptocurrency as payment and forbids ICOs. Our views are absolutely similar.”
In the short term at least, it looks as though momentum is gathering behind a fully restrictive approach in Russia, similar to that already adopted by China. It remains to be seen whether this will have a material effect on market liquidity and pricing if and when these measures come to pass.
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