President of Russia Vladimir Putin has signed into law a national ban on the use of digital assets for payments. The new law requires that digital assets will no longer be accepted as monetary surrogates and therefore cannot be accepted as payments for goods and services.
Other monetary units are also banned, re-affirming rubles as the only officially accepted currency within the Russian federation.
While the new law prohibits the use of digital financial assets to pay for “transferred goods”, performed works, and rendered services, it permits for other cases in the use of DFA payments.
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The central bank in Russia holds that cryptocurrencies should only be used for International settlement which was well received amid harsh sanctions imposed on them following their invasion of Russia.
Despite the adoption of crypto for international payment the government still holds the opinion that the ruble should remain the country’s only legal tender.
Recall that last year Russia’s financial monitoring agency introduced a crypto monitoring service, aimed at the integrity of the mechanism for the circulation of digital currencies into the financial system and ensuring control over cash flows in the circuit of credit institutions.
The agency has disclosed its plans to improve the capabilities of its crypto monitoring service. The ban on crypto in the country was enforced after the government identified specific criminal cases involved in cryptocurrencies adding that the bank of Russia seeks to improve its systems and identify transactions and blockchains that are hidden.
The bank also stated that due to the fact that cryptocurrency records and transactions are stored on the blockchain technology, without the identity of wallet-owners, it makes them difficult to track.
Due to the invasion of Russia on Ukraine, as the country seek to evade sanctions, the Russian government had to develop its digital currency called rubles. The Russian government also cited the environmental impact of cryptocurrencies.
They disclosed that these coins have for long been a cause for concern due to the amount of power used in mining. The government had to ban crypto mining in Russia as they revealed that it affects electricity consumption, as it deals with a severe energy crisis.
It disclosed that Bitcoin mining consumes around 91 terawatt hours of electricity annually. Russia now joins the list of five countries where Bitcoin is banned. Countries where Bitcoin is banned are as follows; China, Bangladesh, Egypt, Morocco, and Russia.
Despite the widespread adoption of these cryptocurrencies in countries around the world, these countries above-mentioned have cracked down on it’s adoption citing various reasons.
Furthermore, these governments want to uphold a regulatory check on transactions and trades initiated from an individual account. Countries like Russia and Thailand disclosed that using cryptocurrency can make it difficult to trace, which can also be used to sponsor terrorism.
The lack of transparency surrounding cryptocurrencies has been a major concern for the government of these countries aforementioned, which is why they are strongly against adoption the use of it in their countries.