The Bank of Russia and the Russian Federal Security Service (FSB) have now made their mind that they will use strict measures to stop the cryptocurrency payments in Russia. The reason behind putting a ban on cryptocurrency payments in the country is that the Russian economy is not doing well at the moment.
Complete cryptocurrency ban would make it a black-market industry
The Bank of Russia wants to make cryptocurrency totally illegal by putting a complete ban on cryptocurrency and everything that is related to it. However, the Russian Federal Security Service (FSB) does not consider it right to impose a complete ban on cryptocurrency.
The crypto industry is likely to become a black-market industry if cryptocurrencies get banned totally in Russia. And it would be a huge favor for criminals if it happens.
The reason is that Cryptocurrencies such as privacy coins like Monero are considered as anonymous, instant, and completely secured. The transactions of Bitcoin might also become anonymous and private with the help of a virtual private network (VPN). So in spite of a complete ban, the use of cryptocurrency cannot be stopped. Therefore, this is not a proper solution.
What solution does FSB propose?
However, the Russian Federal Security Service (FSB) proposes a solution to this matter. It proposes to authorize specialized operators. These operators would provide their exchange services between cryptocurrency and fiat currency and also their duty is to identify the crypto users.
As soon as this proposal turns into a law, then all the crypto holders will have to present themselves for identification. The crypto users will have to lose their anonymity. However, if they do not follow this law, then they might find themselves in jail.
So the current situation in Russia is that either the cryptocurrency gets banned completely or it becomes legal. If the cryptocurrency becomes legal then the crypto users can hold, mine, or exchange cryptocurrency but they are not allowed to use it for payment.
The Russian economy is not steady at the moment
This step to ban cryptocurrency payments in Russia has been taken because the Russian economy is trembling at the moment. The reason behind the unsteady economic condition of Russia is the Coronavirus epidemic. Coronavirus has caused around 2000 deaths.
Russia has currently broken up with its biggest trading partner China to stop the spread of Coronavirus. This had a negative impact on the Russian economy and it has now become unstable. The economic condition of Russia already became unsteady in the year 2019.
However, if Russia fully bans the cryptocurrency, then Russia would be unable to sell Russian Ruble (RUB) for cryptocurrency.