The Ban and Downfall of Bitcoins – A Welcoming Move or a Debacle?

Jan 29, 2022
4 min read

With the crackdown of the government and the Reuters report, it has come to light that the Central bank of Russia has outlined a proposed ban over cryptocurrency use and mining. In addition, bitcoin has also started losing its worth and has almost lost half of its value since November 2021.

The Basics of Bitcoin

The digital currency that works on software, known as bitcoin that we also term as BTC, was created by an alibi known as Satoshi Nakamoto. He outlined the technology that allows for secure peer-to-peer transactions on the internet. Since its launch, bitcoin has become the largest market capitalization and trading agency. The removal of the gatekeepers becomes a source of novel and exciting possibilities and allows individuals to have maximum control over their assets.

Not to forget, bitcoin is legal and operates free of any central control. It is similar to keeping a traditional coin in a physical wallet. Sending money over the internet has become popular, and so has bitcoin.

Bitcoin to Cash - What Is The Catch?

If you think that you cannot convert a bitcoin into cash, then let me tell you that you are entirely wrong! Just like any other asset, bitcoin too can be converted into cash. Mostly you can use two methods.

First, you need to decide which platform is convenient for you. The ideal popular choice is the local bitcoins, popularly known as the peer-to-peer exchange. It provides faster transactions, but it is also crucial to be aware of fraudsters. After you select the platform, you need to sign up and choose the desired location of the ideal buyer. Then, opt for the marketplace to come across buyers and send a trade request. It, on the other hand, helps to stay anonymous. The other way is through exchange or broker, which is similar to the current exchange system. With this method, after deposition of digital currency to exchange and demand withdrawal, the broker will transfer your money to the same bank account you used to buy the coins. Though it is safe and secure, it takes up a lot of time, about four to five days. The exchange is chargeable and varies from nation to nation and the broker.

The Plunge in Bitcoin’s Value and Influence

Since November, the value of bitcoin has fallen terribly with an almost 50% plunge rate along with the surge in cryptocurrency prices. Now with the start of New Year, there can be seen a fall of around 30% altogether till date.

The biggest crypto mining nation, Russia, now says no to crypto mining, imposing a ban on its use and creation. According to assessments, emerging markets, like Russia, face greater threats to their financial stability from cryptocurrencies because of their historically higher propensity to save foreign currency and their lack of financial awareness.

Mining in Russia had become the traditionally important center after China, but as crypto is going against the agenda of the green country and as mining consumes a tremendous amount of energy derived from fossil fuels that harm the environment, governments are calling for its ban. As soon as the ban is in place, Russian institutional investors will no longer be able to own any assets affiliated with crypto-related activities. Privately controlled digital currencies with high volatility have raised concerns that they could undermine the authority of financial and monetary institutions, posing a risk to financial stability, the well-being of citizens, and the country's monetary policy. It is also said that it could lead to economic terrorism.

As of now, as everything is coming into action, Russia has been talking about it for since long about how it could result in money laundering and financial terrorism. The ban, however, includes proposed crypto exchange. The intensification of everything started when China began its crackdown and the blanket ban on all cryptocurrencies and mining.

India’s Stand on Cryptocurrency

India, however, in November 2021, with the finance committee has concluded that cryptocurrencies should not be banned, but regulated, and with that Prime Minister of India, Narendra Modi, has also talked about the indications are that robust and stringent regulatory steps will assumedly be taken to deal with the issue. While posing a severe threat to the macroeconomic and financial stability of the country, it has also raised apprehensions on the proportion of investors trading on cryptocurrencies and their claimed market value. Finance Minister of India, Sitharaman, on the side, terms cryptocurrency as a risk factor and also states the fact, saying in the Lok Sabha that there was no proposal to recognize Bitcoin as a currency in the country and the government will soon introduce a bill.

Thus it has come to light that as the year 2022 started, so has begun the downfall and increased risk of competition in cryptocurrency. But it is not to forget how the audience’s interest in cryptocurrency has touched new heights. It has become a hot topic as we are a famous kind of popular culture. But everything has its pros and cons, right, and so has bitcoin and cryptocurrencies. With the revolution came missteps, wild price swings, and scandals; there has been a drastic fall and is dangerously approaching the USD 30,000 level.

To begin trading on a cryptocurrency exchange, all you need to do is sign up and begin trading immediately. It's a good idea to only invest what you can afford to lose while trading cryptocurrencies because the market is unpredictable. However, the legal status of bitcoin and other altcoins varies substantially from country to country. As per reports, Cryptocurrency Exchange Binance informed Reuters it has pledged to collaborate with regulators. It was hoping the report’s release would induce dialogue with the central bank on protecting the needs and interests of crypto users in Russia. Thus, the future might seem bleak for bitcoins, but all we know very well is that cryptocurrency is a force to be reckoned with, and anything is possible in the future.