According to some Russian sources, the Central Bank of Russia (CBR) is attempting to alter its planned digital currency blanket bank.
We have recently seen lots of news about the vast amount of energy mining activities need to operate. Regarding this issue, many governments have decided to limit or even ban these activities. Similarly, the CBR may restrict Proof-of-Work (PoW) mining operations. Diving into details, the CBR is firm about the mining prohibition, even though the country does not have a specific law for this issue. The main reason they are pro the mining ban is because of the negative side of mining The Russian bank claims that the environment and citizens are the ones who are affected by this mining in the worst way possible.
Can Proof-of-Stake be the Solution?
Furthermore, the Bank of Russia’s primary aim is to stop the circulation of allegedly harmful digital currencies. On the contrary, Proof-of-Stake (PoS) coins are more energy efficient. For this reason, PoS tokens and cryptocurrencies may continue circulation. In the report, the vice-chairman of the European Securities and Markets Authority (ESMA), Erik Thedéen, states a similar view. He has recently advocated for a pan-European consensus on a crypto mining ban.
Moreover, the Russian prohibition is encountering tremendous criticism inside the nation. Finest tech and political elites are particularly opposing the proposals to ban cryptocurrencies. On the other hand, Fitch Ratings is a platform that provides worldwide economic evaluations, criteria, and procedures. According to Fitch, it highlighted that the ban may work in helping Russia manage the liability that may be linked with the digital currencies. Despite this, it may also stifle the nation’s development of new financial technology.
As data shows in the Fitch report, the CBR bank has developed a proposal with new restrictions about using crypto. Based on this strategy, Russia will reduce the financial system’s exposure to developing sector risks. However, it may slow the spread of blockchain technology that might increase productivity.