Russian authorities
have for years criticised cryptocurrencies over fears they can be used for
illegal activities and have called for regulation.
Authorities granted
cryptocurrencies legal status in 2020, but their use in payments was never
authorised.
The Bank of Russia called Thursday for
reinforcing the ban on cryptocurrency payments, banning cryptocurrency mining,
and tightening laws on trading virtual money.
"The use of cryptocurrencies creates
significant threats to the well-being of Russian citizens and the stability of
the financial system," a report published by the central bank said.
It added that the swift growth of
cryptocurrencies is driven by "speculative demand" that leads to the
forming of a "bubble".
The report added that cryptos resemble financial
"pyramid schemes" because their value increases with the emergence of
new players on the market.
It estimated the annual transaction volume
of Russian citizens at $5 billion.
Bloomberg earlier cited sources as saying
that Russia's domestic security agency, the FSB, had lobbied central bank head
Elvira Nabiulina for a ban.
The FSB cited concerns over Russians
frequently using the hard-to-trace transactions to support "undesirable
organisations", such as opposition groups.