The Russian central bank is gearing up to ban investment in cryptocurrencies, report says

• Russia's central bank is looking to prohibit investment in cryptocurrencies, Reuters reported Thursday.
• The Bank of Russia is talking with market players and experts about the possible ban.
• The ban could be applied to new cryptocurrency transactions but not prior ones.

Russian central bank officials are working on prohibiting cryptocurrency investment to tame financial stability risks that it sees from an increase in crypto transactions, Reuters reported Thursday.

The Bank of Russia is talking with market players and experts about the possible ban, the report said, citing two unnamed financial market sources close to the central bank.

One source said the ban may apply to new purchases of crypto assets but not prior transactions. Another source close to the central bank said its current position is a "complete rejection" of all cryptocurrencies.

The Bank of Russia, in reply to a Reuters request for comment, said it was preparing an advisory report to voice its stance on the issue. It didn't mention any specifics.

The increasing popularity of cryptocurrencies has raised concerns about financial stability, Central Bank First Deputy Governor Ksenia Yudaeva said earlier this month. The annual volume of crypto transactions carried out by Russians is about $5 billion, the central bank says, according to the report.

Russia for years has spoken against cryptocurrencies, saying the digital assets could be used to launder money or finance terrorism. The country in 2020 gave them legal status but banned them from being used as a means of payment, the report said.

A Russian crypto ban would follow China's. In September, Beijing declared all cryptocurrency transactions illegal amid an escalating crackdown on the sector.

Still, the crypto market has boomed this year as more institutional and retail investors jump in. Its valuation had risen to $3 trillion for the first time but has since pulled back about $2.3 trillion.