Russian crypto ban to damage ‘high-tech economy’

By: Daniela Kirova
Daniela Kirova
Daniela has been writing translating cryptocurrency and investment content for more than 15 years. Her experience includes ghostwriting portions… read more.
on Jan 24, 2022
  • Telegram CEO: Ban will destroy a number of sectors of the high-tech economy
  • Leonid Volkov likened the ban to calling a spade a spade
  • Crypto mining has been banned in Kosovo, Georgia, Kazakhstan

Russia’s recent ban on crypto has attracted severe criticism from high-profile figures such as Telegram founder and CEO Pavel Durov and Leonid Volkov, Navalny’s chief of staff, CoinTelegraph reported.

Central bank: Crypto poses higher risks to emerging markets

On Thursday last week, Bank of Russia proposed a ban on domestic crypto mining and trading. According to their report, the risks of crypto are “much higher for emerging markets, including Russia.”

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On Saturday, Telegram founder Pavel Durov posted on his medium that the proposed ban on crypto would “destroy a number of sectors of the high-tech economy,” adding:

Such a ban will inevitably slow down the development of blockchain technologies in general. These technologies improve the efficiency and safety of many human activities, from finance to the arts. Such a ban is unlikely to stop unscrupulous players, but it will put an end to legal Russian projects in this area.

Volkov: ‘Impossible’ to ban crypto

Volkov likened the ban to “calling a spade a spade.” He is the chief of staff of Alexei Navalny, who founded the Anti-Corruption Foundation (FBK) in Russia. In 2020, he was poisoned with Novichok, a nerve agent. He recovered in Germany and returned to Russia in 2021, where he was arrested. He remains in prison since.

Volkov made reference to a recent Bloomberg report, according to which Russia’s Federal Security Service was promoting the ban because crypto could be used to finance the opposition and extremist groups. He added that Russians were less likely to donate crypto to the FBK than they were to buy drugs with it.

Volkov said:

Technically, banning cryptocurrency is the same as banning person-to-person transfers (i.e. it’s impossible). Yes, they can make it very difficult to deposit funds on crypto exchanges, which means that intermediary services will simply appear that will do this through foreign jurisdictions. Yes, transaction costs will rise. Well, that’s all, I guess.

Crypto banned in most countries in the region

Citizens of Georgia, which shares borders with Russia, were recently made to swear they would stop mining crypto. Crypto mining has been banned in Kosovo and Kazakhstan as well. As always, Ukraine is an exception in the region. In 2021, the government passed laws to make it easier to adopt crypto.

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