The Bank of Russia has called for a full ban on cryptocurrencies in the country, citing high volatility and "proliferation of fraud" as key reasons.
The bank noted that the global cryptocurrency market surged over the past year, hitting a market capitalisation of $2.3trn in December 2021.
In a statement on Thursday (20 January), Bank of Russia said: "Owing to anonymity in transactions, money substitutes are extensively used for illegal activities."
The call to ban crypto in Russia was made in a report presented by the central bank's director of financial stability.
In the report, Cryptocurrencies: Trends, Risks and Regulation, the bank highlighted that despite the traditional involvement of financial intermediaries in the cryptocurrency market being currently limited, the volume of derivates and shares of ETFs related to crypto is growing, while decentralised finance ecosystems are evolving.
The report also noted that there is currently no global approach to cryptocurrency regulation, and that the digital asset represents a grey area.
According to the bank, the amount of Russian citizens' transactions with cryptocurrencies is reaching $5bn per year.
It said: "Russian individuals are active users of online cryptocurrency trading platforms. Moreover, Russia is one of the global leaders by mining capacity."
The bank added: "The rapid growth of [cryptocurrency[ market value is predominantly spurred by speculative demand and expectations of a further rise in their prices, which leads to the formation of a bubble in the market.
"Cryptocurrencies also have signs of a financial pyramid as increase in their prices is largely driven by demand demonstrated by new market participants."
