This is how the central bank can bar Russians from buying Bitcoin

This is how the central bank can bar Russians from buying Bitcoin

In January 2018, the central bank of Russia issued a statement warning that Bitcoin is not recognized as money or legal currency in Russia and all operations with them are prohibited. The move was an attempt to stem the flow of capital into cryptocurrencies from across its borders.

The “future of crypto gaming” is a question that has been asked for quite some time. The answer to this question is that the central bank can bar Russians from buying Bitcoin.

This is how the central bank can bar Russians from buying Bitcoin

Sources in the financial markets sector said last week that Russia’s central bank (Centrobank) plans to prohibit citizens from purchasing Bitcoin and other cryptocurrencies. 

As a result, according to a knowledgeable source who spoke to Forbes today, one of the presently contemplated methods to do so is to prohibit specific merchant category codes (MCCs).

When a payment is made, credit card issuers like as Visa or Mastercard use a four-digit number called an MMC to categorize retail services. Payments at food shops, for example, are made using the code 5411. Exchanges and other crypto-related firms also have their own MCC, which is generally 0651.

Some Centrobank workers have indicated to Andrey Mikhaylishin, CEO of crypto payments processor Joys Digital, that Centrobank is presently proposing a ban on any transactions using crypto-related MCCs. If this plan becomes law, the regulator would have the power to compel other Russian banks to prevent similar transactions.

However, another person close to the regulator told Forbes that this is simply one of the techniques being investigated “among many others.”

Not everyone is on board with this.

According to reports, Centrobank’s new anti-crypto push was prompted by concerns about “the expanding volume of crypto transactions” posing a threat to the country’s financial stability.

Centrobank’s first deputy chairman Olga Skorobogatova reportedly stated at the cryptocurrency regulation working group meeting on Monday that while the regulator does not intend to develop a new bill prohibiting cryptocurrencies, it still “considers crypto circulation unacceptable and plans to prohibit investments in digital assets.”

Against the plus side, Centrobank, with its adamant position on cryptocurrency, was said to be in the minority at the conference. “There’s the central bank’s view—and then there’s everyone else’s position,” another person said.

‘Disastrous repercussions’ are the words that come to mind.

While a prohibition on crypto-related MCCs alone isn’t cause for alarm, InDeFi SmartBank CEO Sergey Mendeleev believes the central bank’s plan might have “disastrous implications” in general, depending on how far the regulator is prepared to go.

“I don’t just believe; I am certain that such a scenario has already been created and will be realized by next spring,” he said. “The issue is, how broad will this restriction be?”

According to him, if the prohibition is confined to crypto-related MCCs, “no one will even notice.” A hypothetical introduction of criminal responsibilities, on the other hand, may be disastrous—but not for the crypto business.

“This will only serve to exacerbate Russia’s technical backwardness.” A crypto prohibition would result in the loss of all workers in this field, including entrepreneurs and software engineers, as well as financial experts and simply brilliant, ‘motivated’ individuals, according to Mendeleev.

Furthermore, he said that a crypto prohibition might have a significant impact on the well-being of Russian investors, adding:

“While Singapore, Zug, Miami, Dubai, San Francisco, New York, Paris, and London will continue to reap the rewards of their crypto-friendly policies, Russia will simply send its huge human resources to neighboring nations for free.”

Overall, such a prohibition would result in the loss of investments from major foreign funds, which would have a “very severe influence on the country’s economy” and might result in a “outflow of young and brilliant individuals,” according to Mendeleev.

“In this scenario, I advise going even farther and banning electricity completely.” This would instantly handle all of our transportation and tariff concerns, as well as the opposition’s YouTube videos,” he concluded. “Let’s simply put a radio receiver in each room and read Pravda by the light of Russian Orthodox Church candles.”

This is how the central bank can bar Russians from buying Bitcoin

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