• Russian political leaders and prominent businessmen protest government plans to restrict and ban the cryptocurrency industry.
• The Central Bank of Russia’s proposal comes at a time when tensions are rising over conflict between Russia and Ukraine.
• Pavel Durov says he is in favor of regulations. However, he asks for caution and balance when applying them.

Telegram CEO and founder Pavel Durov has joined the chorus of critics of the Central Bank of Russia’s proposed move to ban Bitcoin and the mining and trading of cryptocurrencies in the country.

In a message posted on Telegram, Durov remarked that any restrictions put in place over the crypto industry would only encourage IT specialists to send their cryptocurrencies out of the country, “destroying a whole range of high-tech economies.”

The central bank’s proposal has been launched at a time when tension between Russia and the West are particularly high. NATO forces are still deployed in the area this week and ready to face a Russian invasion of Ukraine.

The Russian billionaire businessman believes that if these measures are not approved by the issuer, then the entire industry of blockchain will likely be affected.

The Central Bank of Russia considers cryptocurrencies to be serious threat to the country’s financial stability. The issuer stated that it would put at risk the sovereignty and well-being Russian citizens.

Bitcoin’s Price Stumbles

BTC’s threat and the Russian cryptocurrencies have had an already negative impact on cryptocurrency prices. However, it recovered slightly by Tuesday 8:04 AM ET to $36,558.

Russia is home to some of the best crypto experts in the world. Durov says that these experts would have to transfer their money outside Russia, if Durov’s proposal is approved.

Contrary to the belief of the Central Bank of Russia, the Telegram executive believes that Bitcoin technology “improves the efficiency and security of many human activities, from finance to the arts.”

He added that “distributed ledger database solutions using cryptocurrencies as units of measurement are replacing the obsolete period of financial systems in the second half of the XX century.”

The Flipside

• Durov believes regulation is essential, but he insists on the need to apply them carefully and in a balanced manner.
• He argues that if Russian authorities act prudently and promote “careful regulation, it will allow the country to balance the distribution of forces in the international financial system and become one of the main players in the new economy.”

Durov believes that despite being in the middle of conflict, his country can observe what Uzbekistan (and Ukraine) are doing. In his opinion, these countries have adopted a “progressive” regulatory framework around the crypto industry because “they do not want to be left out of technological and economic progress.”

Durov concluded that while banning Bitcoin could effectively end the development of legal projects in Russia’s cryptocurrency sector, it may also kill illegal actors in the market.

Interests in dispute will be protected from the ban

Leonid Volkov (Russian opposition politician) reaffirmed his belief that Bitcoin would not be prohibited in Russia because there are so many stakes within the government. Progress Party member and the former president candidate Aleksei Nailny’s successor, thinks that eliminating cryptocurrency is impossible.

Volkov argues, that the Russian Federal Security Service has played a key role in promoting BTC ban in Ukraine. The agency considers cryptocurrencies to be a vehicle used to finance “non-systemic opposition and extremist organizations.”

According to him, Russia is unlikely to ban cryptocurrency because Russians use it to buy drugs and not give them away to the government.

“Technically, banning cryptocurrencies is the same as banning person-to-person transfers (i.e. impossible)… Yes, they can make it very difficult to deposit funds on cryptocurrency exchanges, which means that intermediary services will simply appear that will do it through foreign jurisdictions,“ he added.

Why you should care

• Russia is currently the focal point of the current political conflict between East and west. In the next weeks, what will happen at Russia’s border with Ukraine is sure to have profound implications for crypto markets and the overall world economy.

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