cryptocurrency
Russia is considering banning cryptocurrencies – Bitcoin price collapses
The price of bitcoin slipped 7 percent in one day, hitting its first low for the year.
© Viktor Gladkov / Picture Alliance
In a detailed report, the Central Bank of Russia calls for a ban on trading and mining of cryptocurrencies. The course of all coins, including Bitcoin, Ethereum and Cardano, dropped significantly.
Shock for crypto investors: In a recent report, the Russian central bank proposes that the government ban trading in crypto currencies and their mining (mining) nationwide. There are different reasons for this. On the one hand, the virtual money endangers “financial stability” and serves as a “means of financing criminal activities”, on the other hand, the production of some coins harms “Russia’s green agenda and the energy supply.”
As a consequence, the bank is demanding that all transactions related to cryptocurrencies be prohibited. This would affect the purchase, trade, sale and all services related to Bitcoin and Co. There had already been public headwind for virtual currencies in Russia. Russia’s central bank governor Elvira Nabiullina has been very critical of this topic on several occasions.
Price falls to provisional low for the year
the course of currencies plummeted after the proposal was published, even though no ban has yet been imposed. A Bitcoin currently costs around 39,000 US dollars. The price has almost halved, down 43 percent, from its all-time high in November 2021 of $68,789.63.
This is also due to the fact that, according to a study by the University of Cambridge, Russia is home to the third largest crypto mining industry in the world, which has gained additional importance since China banned all activities related to crypto money. It is currently not known whether the Russian government will follow the bank’s recommendations. If that happens, another price slump is inevitable.
2022 starts badly for Bitcoin and Co.
For Bitcoin and Co., this is just one of many lows this year. The unrest in the mining stronghold Kazakhstan led to a measurable loss of global computing power and an uncertain US monetary policy is unsettling investors. Hackers also stole more than $30 million worth of coins from supposedly secure accounts at one of the world’s largest cryptocurrency exchanges, Crypto.com.
Panic sales of mining hardware also occurred in Kosovo, since the mining of the coins was also prohibited there for energy policy reasons. No wonder, because the global energy consumption for mining and trading cryptocurrencies is currently higher than the total consumption of countries like Norway or Ukraine. It quickly becomes a problem for weaker power grids when the limited resources are tapped for this purpose.
Sources:Bank of Russia, University of Cambridge, Crypto.com, Guardians