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Russia: Latest crypto crackdown poses no problems for data centre companies

A new crypto crackdown by the Bank of Russia is unlikely to harm BitRiver. BitRiver is the largest cryptocurrency mining colocation service provider in Russia.

Central Bank of Russia Restric Crypto

The central bank of Russia said that it has begun working with local banks to restrict payments to cryptocurrency exchanges.

According to reports, the first deputy governor of the Bank of Russia, Sergey Shvetsov, is contemplating changing the legislation. This change is to “more explicitly ban the use of cryptocurrencies” and create extra administrative and criminal penalties.

Shvetsov did not specify which types of crypto transactions are under prohibition as part of the new regulatory crackdown. However, he did say that the bank wants to stop payments to crypto-exchanges to safeguard consumers from “emotional” crypto purchases.

BitRiver Unaffected

BitRiver does not run a crypto mining facility but rather supplies data centres for international firms. So, the new limitations announced by the central bank of Russia are unlikely to harm any of its clients. This is according to BitRiver founder and CEO Igor Runets.

According to Runets, BitRiver has been anticipating severe crypto regulations from the Russian government for some time. They have sent advice to its Russian clients to utilise BitRiver’s crypto data centres by forming a foreign corporation. “We don’t have any problems now,” Runets remarked.

“We occasionally hear from clients who want to establish a firm in Russia to make it easier to supply equipment from abroad. But, even for them, the Bank of Russia is unconcerned because the cryptocurrency does not reach a Russian company’s account,” he noted.

Russia’s Plan for CBDC

The Bank of Russia’s new anti-crypto measures come only months after the signing of the country’s key crypto statute, “On Digital Financial Assets,” into law in January.

According to Nikita Soshnikov, a former senior lawyer at Deloitte CIS, the central bank’s crackdown is part of an attempt to juxtapose private cryptocurrencies with the digital ruble at the country’s central bank digital currency (CBDC) initiative. The Bank of Russia announced intentions to create a CBDC before 2030. This is one of the country’s most important digitalisation initiatives.

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