After weeks of uncertainty surrpunding Russia's plans for cryptocurrencies, local news outlet RBC reports overnight that Bank of Russia is working with the country’s general prosecutor to block all exchanges offering Russians the opportunity to buy and sell cryptocurrency.
As CoinTelegraph reports, first deputy of the central bank, Sergey Shvetsov, said during an international finance forum in Moscow:
“It’s obvious that when a pyramid (scheme) grows, interest in this pyramid hots up with the high rate of return." Echoing previous comments, Shvetsov added that the pyramid description is a result of “eyeing Bitcoin’s price dynamics over the past two years.”
The move is the most sweeping yet from Russian authorities regarding cryptocurrency access for citizens, and echoes the less coordinated bans of various industry resources common until last year. The debate as to how to handle cryptocurrency has raged throughout 2017 in Russia, with various high-profile entities giving conflicting views as to what the future will hold in terms of regulation.
This regulation is ostensibly due to go public by the end of the year.
In the meantime, not just private investors, but also the business sector faces “too high a risk” using cryptocurrency,Shvetsov said.
“We cannot stand apart. We cannot give direct and easy access to such dubious instruments for retail (investors),”
Financial instruments based on cryptocurrency are “impossible to support,” he continued, adding measures would be taken to “restrict” the ability of the Russian domestic market to interact with them.
The reaction was varied. As Coinivore notes, Bitcoin prices flash-crashed on CoinDesk...
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Notably, this would be the third time that the country has issued some form of ban against Bitcoin and digital currency in the past several years.
Russia’s Central Bank just approved its first exchange “Voskhod,” so this is likely a temporary ban until regulations are set which will likely ban normal Russian citizens from investing into cryptocurrency due to high volatility.
However, Bitcoin is now higher on the day (bouncing back as it did from China's ban), and as BitStamp data shows, not every exchange shows the flash-crash...
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It seems the market for Bitcoin is quick to realize that the dcecentralized nature of the cryptocurrency framework means that whiole short-term demand from localized exchange closures may hobble prices, it does not affect the overall value of the independent currency (just as many have found out since China blocked exchanges).
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