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Russia has been uncertain about crypto regulation in the country for so many years. The country has not yet finalized its major crypto legislation, known as ‘On Digital Financial Assets’.
- Senior Russian official warns that a pending bill on digital assets will include a ban on crypto.
- The ban comes as a huge blow for cryptocurrency enthusiasts looking to capitalize on resurging BTC prices.
- Meanwhile, the Bank of Russia is prioritizing a pilot tokenization project to rival traditional digital assets.
According to a legal executive at the Bank of Russia, the bill, when passed, will ban the issuance and circulation of cryptocurrencies. Head of the legal department at Russia’s central bank, Alexey Guznov revealed the news on March 16 during an interview with local news outlet, Interfax.
Cryptocurrencies may be gaining traction around the world, but they aren’t welcome in Russia, which is taking drastic steps to ban them.
Government officials have warned that this pending bill seeking to ban crypto activity within the country’s borders stems from the ongoing panic caused by the coronavirus pandemic.
Regulators say that now, more than ever, BTC and Altcoins are showing their volatility to be extremely dangerous and that it’s simply not safe to allow operations surrounding crypto in the coming future.
Alexey Guznov, Russia’s central bank head of the legal department, was quoted saying:
“We believe there are big risks of legalizing the operations with the cryptocurrencies, from the standpoint of financial stability, money-laundering prevention, and consumer protection.”
However, Russian officials recognize they will not be able to completely stop cryptocurrency transactions, with Guznov saying authorities will not pursue individuals who made their deals in a country where it was legal.
Russia’s Announcement is a Big Blow to Crypto
Russia’s Announcement is a big blow to cryptocurrencies around the world in a time where many are hoping for accelerated adoption.
The bill couldn’t have come at a worse time, right as BTC is starting to show signs of a price resurgence after the recent March 12 crash. This is projected to be a time when many crypto enthusiasts are thinking of jumping back into the BTC market, but those in Russia are sadly going to face opposition in the coming months.
Alex Kuptsikevich – a senior financial analyst at FX Pro – comments that Russia was likely waiting for the crypto fad to dissipate. However, at the time of writing, things aren’t looking good in the crypto market.
He states that Russian lawmakers didn’t see this coming and have been putting the ban off, hoping things would fix themselves.
The new law is similar to those enforced by countries like China and South Korea, which have instilled bans against initial coin offerings (ICOs) and additional crypto-related activities.
The Kremlin Sets up A Digital Agenda
Bank of Russia (CRB) reported at the end of last year that it was running a pilot tokenization project by mining startup Nornickel, which is working to issue metal-backed stablecoins.
Nornickel is now testing its marketplace for digital tokens, registered in Switzerland. Stablecoins like these are within the framework of the pending digital assets bill and are meant to rival traditional digital currencies such as BTC and ETH.
And just a few weeks ago in Feb. 2020, the CBR announced it had succeeded in developing a platform that lets users tokenize assets such as equities and fiat currencies.
Featured image courtesy of Shutterstock.