On Jan. 20, the Central Bank of Russia (CBR) issued a report summarizing its position on digital assets and proposing a ban on any crypto trading and mining operations in the country. Although the CBR’s strict position on the matter was never a secret, such a bold statement triggered waves of fear, uncertainty, and doubt — otherwise known as FUD — across the board, given Russians’ high rates of involvement in the global digital assets market. 

Yet, there are reasons to doubt the ultimate effectiveness of the CBR’s hardline bidding, both in terms of its enforceability and its acceptance by other power centers, including legislators and siloviki (securocrats). The picture gets even more complicated for the central bank, as a high-ranking official within another major center of economic policy, the Ministry of Finance, spoke in favor of regulating, rather than banning, crypto earlier this week. What are the chances that the hardline approach will prevail?

What does the CBR intend to ban?

Using an assortment of standard crypto-phobic arguments, such as comparing digital assets to a Ponzi scheme, the central bank’s “Cryptocurrencies: Trends, risks, measures” report calls for a complete domestic ban on over-the-counter trading desks and crypto exchanges alongside mining. Notably, the emphasis is on using the legacy financial infrastructure: The CBR addresses its document to private banks and institutional investors, discouraging them from any involvement in digital assets.

In its current version, the proposed ban would not outlaw the possession of digital assets…

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