Pavel Durov criticises Bank of Russia proposal to ban cryptocurrencies and mining

Telegram founder Pavel Durov criticised the Bank of Russia’s proposal to ban mining and cryptocurrency operations within Russia. According to him, this would drive IT specialists out of the country and wipe out high-tech sectors.

“The drive to regulate the circulation of cryptocurrencies is natural on the part of any financial authority. However, by recommending a total ban on cryptocurrencies, the Central Bank of Russia risks throwing out the baby with the bathwater. Such a ban is unlikely to stop bad actors, but will spell the end for legitimate Russian projects in this sphere,” he wrote.

In Durov’s view, banning cryptocurrencies would inevitably slow the development of the broader blockchain technologies sector. He stressed that Russia is among the leaders in the number of high-calibre specialists in this field and could become a major player in the new economy if there is thoughtful regulation.

On 20 January, the Bank of Russia proposed banning the issuance, circulation and exchange of cryptocurrencies, as well as organising such operations on Russian soil. The regulator said that these digital assets (including stablecoins) could replace fiat money, but are used primarily for illegal activity.

ForkLog experts called the ban on bitcoin operations in Russia a step toward the country’s hopeless lag in technological development. In their view, such an initiative would provoke a brain drain and inflows into the economy, but the market as it stands will not be killed.

Representatives of the mining industry say that the regulator’s arguments in the regulator’s report in favour of banning mining operations in Russia do not stand up to any criticism.

On 21 January, the chair of the State Duma Committee on Industry and Trade, Vladimir Gutenev said, that mining farms could be left unbanned if they operate under strict state oversight.

As Bloomberg reports, the head of the Bank of Russia Elvira Nabiullina backed a full ban on cryptocurrency operations due to an agreement with the FSB.