Russia's central bank is calling for a sweeping ban on crypto activity from mining to trading

markets.businessinsider.com:

Gavriil Grigorov\TASS via Getty Images

The central bank of Russia is calling for a sweeping ban on cryptocurrency activity from mining to trading, according to a report released Thursday.

In a report entitled «Cryptocurrencies: trends, risks, measures,» the central bank laid out the threats posed by digital assets.

«Potential financial stability risks associated with cryptocurrencies are much higher for emerging markets, including in Russia,» the report said. «This is due to the traditionally higher propensity for saving in foreign currency and an insufficient level of financial literacy.»

The report pointed to the speculative nature of digital assets, which it said has led to the formation of a bubble. Such assets also exhibit traits similar to a financial pyramid as their prices are largely dictated by demand driven by new market participants, the report added.

«Just as dollarization, cryptoization limits monetary policy sovereignty, which might force central bank to permanently maintain a higher key rate in order to contain inflation,» the report said. «This will reduce the affordability of credit to both households and businesses.»

To mitigate these threats, the bank proposed three amendments to Russia's existing regulations:

The report also tackled crypto mining, saying that it jeopardizes the green agenda of Russia. The country is the third-biggest crypto mining nation in the world. Mining, according to the report, endangers the country's financial stability in several ways, the bank said. It creates unproductive consumption of electric power, which threatens the power supply of residents and businesses.

It also said crypto mining creates the demand for infrastructure and machinery and exacerbates the «negative effects»