The Bank of Russia is looking to ban the issuance and circulation of cryptocurrency amidst the ongoing market turmoil.

After years of uncertain cryptocurrency regulations, a legal executive at the Bank of Russia says the central bank is working on an unfinished bill, titled “On Digital Financial Assets,” that will outright ban the issuance and circulation of cryptoassets. 

Alexey Guznov, head of the Russian central bank’s legal department, told locall news outlet Intervax that the bill was in the process of being finalized.

According to Guznov, amendments to the original “On Digital Financial Assets” bill seek to ban cryptocurrency trading and circulation, with an exception for current holdings. Guznov explained the bill will explicity prohibit the issuance and circulation of cryptocurrency and introduce penalties for violators. 

He said, 

In terms of the functioning of the financial system and consumer protection system, legalization of the issuance and facilitating the circulation of cryptocurrencies is an unjustified risk. As such, the bill explicitly prohibits emission and organization of cryptocurrency circulation, introducing legal liability for violating these rules.

Guznov was sparse on details when questioned how the central bank would handle transactions made in cryptocurrency. However, he explained there were limitations to the bank’s oversight.

He concluded,

If a person who owns, for example, Bitcoins, completes a transaction in a jurisdiction that does not prohibit this, we are unlikely to be able to regulate that.

Russia’s media watchdog, as CryptoGlobe reported, blocked six cryptocurrency-related websites earlier this month citing a prohibition by the country’s Central Bank against virtual currencies. 

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