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Concequences of Cryptocurrency ban in Russia

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The Russian authorities want to completely ban cryptocurrencies mining on the territory of the Russian Federation. Individuals and organizations will be fined for violation of this law. In addition, holding of Bitcoins and other digital assets also may not be entirely legal.

Russia Can Erect the Iron Curtain

The Head of the State Duma Committee exploded a bombshell. Anatoly Aksakov reported that administrative responsibility could be imposed for bitcoins mining in the Russian Federation. Judging by the official, a new rule is introduced regarding cryptocurrency, i.e. any activity in blockchain sphere that is not explicitly allowed by Russian law is banned.

The Law on Digital Financial Assets was received by the State Duma in the spring of 2018. According to Anatoly Aksakov, it may be adopted in the final version by the end of June 2019.

Hard restrictions may be imposed on holding cryptocurrencies. There is no direct ban, but the person will have to prove the legality of its purchase on foreign trading platforms. At the same time, cryptocurrency exchanges in Russia will not receive a work permit. Having said so, the official noted that he foresees the growth of Bitcoin popularity in the nearest future. It seems that the new initiatives are accepted completely in keeping with the spirit of the Law on the Sovereign Internet, which was adopted on May 1, 2019.

Does Ban Help to Stop Miners?

As of today, there are no countries in the world that would completely prohibit cryptocurrency mining. At the beginning of April 2019, the Chinese Development and Reform Commission proposed a ban on cryptocurrency mining, however, this initiative wasn’t accepted approvingly. Consideration of the new Chinese law was supposed to end on May 8, but the decision was never made.

Bitmain, Canaan Creative and Ebang, the largest mining equipment manufacturers are in China. They said that such initiatives would have no impact on their business, and if necessary, they would transfer their activity to other regions.

Taiwan is the China’s loophole. The main trading platforms were relocated exactly there after the introduction of a cryptocurrency trade restriction. However, such indulgences are not provided for Russians.

Indian Experience of Banning Cryptocurrency

India experience is no less interesting, where cryptocurrency trade has not yet been regulated. The country's central bank has banned commercial banks from servicing cryptocurrency exchanges. However, this led to unpredictable consequences. Indians are very interested in mining and cryptocurrency trading, but income from providing services is received by foreign companies.

Clients from India are ranked 4-5 in the number of traders on cryptocurrency trading platforms. In the era of financial globalization, they find ways to withdraw funds abroad and trade there without the slightest restriction.

Until recently, the Russian citizens also relatively calmly bought and sold cryptocurrency on foreign trading platforms. Currently, there are a lot of questions that the authorities are not yet ready to answer. However, it is already clear that restrictions don’t lead to the desired results. Investors, traders and miners find ways to circumvent the ban. Still, countries at the same time are losing huge sums due to short-received taxes and fees.

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