The prospect of a trading and mining ban in Moscow is dampening global crypto confidence

<p>If rumours are to be believed, Russia's central bank is considering a ban on both cryptocurrency trade and mining.</p> <p>Moscow has detailed the hazards involved with the sector in a newly released consultation paper. It was mentioned,</p> <p>"High volatility and the prevalence of fraud in cryptocurrency trading expose investors to the risk of losing a major percentage of their capital and, in the event of leveraged trading, becoming a debtor."</p> <p>Potential stability risks have been identified</p> <p>Furthermore, the 'possible financial stability risks' posed by cryptocurrency are greater in emerging nations such as Russia. This is due to the fact that, as it was added,</p> <p>"Due to a historically larger proclivity for saving in foreign currencies and a lack of financial literacy."</p> <p>The central bank also stated that all major regulators are issuing consumer warnings describing "excessive risks inherent with cryptocurrency investment." Several agencies have labelled cryptocurrency as "speculative investments" with significant risk. Furthermore, Moscow refers to cryptocurrency values as financial pyramids, which are mostly driven by demand expressed by new market participants.</p> <p>As a result, its judgement is based on serious concerns that can severely influence retail investors, financial stability, and bring dangers from the usage of cryptocurrency for illegal activities. According to the report,</p> <p>"Cryptoization, like dollarization, limits monetary policy sovereignty, which may require central banks to maintain a higher key rate indefinitely in order to prevent inflation."</p> <p>According to the central bank, this also reduces the affordability of lending for both households and enterprises.</p> <p>Given these hazards, Moscow is likely to outlaw cryptocurrency as a form of payment, as well as trading on exchanges and peer-to-peer platforms. Furthermore, all financial institutions may be prevented from investing in cryptocurrency. TCS Group Holding, a Russian lender, recently a