Russia’s proposal for an outright ban of cryptocurrency has been condemned by a number of big personalities and entities in the country, including Pavel Durov, the founder of Telegram, and Leonid Volkov, Alexei Navalny’s chief of staff.
It can be recalled that the Central Bank of Russia proposed a blanket ban on domestic crypto trading and mining in a report published on 20th January 2022.
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In the report, the bank pointed out that the risks of cryptocurrency are much higher for emerging markets, which include Russia.
Howbeit, the proposal is seemingly going to be opposed due to the fact that it isn’t gaining universal acceptance in the country.
On 22nd January, Pavel Durov, the founder of Telegram, stated in a post on his platform that the proposed ban on the use of digital currency would destroy a number of sectors of the high-tech economy.
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Pavel Durov noted:
“The ban on cryptocurrencies proposed by the Central Bank of Russia will lead to an outflow of IT specialists from the country and destroy a number of sectors of the high-tech economy.
“No developed country bans cryptocurrencies. Reason: such a ban will inevitably slow down the development of blockchain technologies in general. These technologies improve the efficiency and safety of many human activities, from finance to the arts.
“Solutions based on distributed ledgers, using cryptocurrencies as units of calculation, are replacing the obsolete centralized financial systems of the second half of the 20th century.”
However Durov agrees with the fact that the crypto industry needs regulation in the country, but a blanket ban is not an option:
“The desire to regulate the circulation of cryptocurrencies is natural on the part of any financial authority. However, while recommending a total ban on cryptocurrencies, the Central Bank of the Russian Federation suggests throwing the baby out with water. Such a ban is unlikely to stop unscrupulous players, but it will put an end to legal Russian projects in this area.”
Also, in a post on Telegram on 20th January, the chief of staff for Alexei Navalny, Leonid Volkov, pointed out that it’s impossible to ban crypto.
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Highlighting the negative effect of the proposal and how it’s impossible to ban cryptocurrency in Russia, Alexei Navalny wrote:
“Technically, “banning cryptocurrency” is the same as banning person-to-person transfers (i.e. impossible). How does the same localbitcoins work (blocked in Russia many years ago, which does not bother anyone)? I transfer bitcoins to someone, he transfers rubles from my account to an account in a conditional Sberbank.
How is Nabiullina going to deal with this, I wonder? Yes, they can make it very difficult to deposit funds on crypto exchanges, which means that intermediary services will simply appear that will do this through foreign jurisdictions. Yes, transaction costs will rise. Well, that’s all, I guess. Globally, what Nabiullina is trying to pull off is Luddism, the struggle against technology and technical progress. Luddism is doomed.”
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