Russians Have Invested $67 Billion In Crypto As The CBR Flirts With A Ban
December 22 2021 - 6:00PM
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According to a recent report by a Russian lawmaker, the country’s
citizens have invested over 5 trillion rubles ($67.5 billion) in
the crypto market, but the regulatory terrain remains hostile and
unclear with the governor of the Central Bank of Russia
increasingly hinting at a highly regulated environment
Cryptocurrencies have had legal status in Russia since 2020,
although it is forbidden to use them as means of payment in the
country. Authorities, however, have expressed opposing views
stating that they could be a tool of money laundering and possibly
used finance terrorism. The law “On Digital Financial Assets”
entered into effect this year and regulated a few activities.
Despite recent warnings on a possible ban, the Russian crypto
market has seen remarkable growth. The head of the Financial Market
Committee Anatoly Aksakov stated during hearings at the lower house
of the Russian parliament that residents have invested over $67.5
billion in crypto, although he didn’t specify a timeframe, the
state-owned agency Tass reported. According to some reports, 5
trillion rubles have already been invested by Russians in
cryptocurrency This crypto Russian boom might see big obstacles in
the near future. Aksakov empathized several kinds of investors,
including the common Russian, are now interested in the crypto
market. He stated: “It is necessary to determine how we treat
this phenomenon and, accordingly, prescribe liabilities in the law,
should we prohibit or restrict something.” Authorities have warned
and taken a few measures against what they see as high-risk
investments for residents with low financial literacy attracted to
the crypto market. However, there is not enough regulatory clarity
for Russian crypto investors at the moment and authorities have
sent mixed signals about future legal actions. The deputy chairman
of the Central Bank of Russia (CBR) Vladimir Chistyukhin announced
recently that they are preparing an advisory report in which the
regulators will start to provide more clarity by explaining the
bank’s stance on how cryptocurrencies shall play a role in Russia’s
financial market. I think that we will soon publish a report on
cryptocurrencies. This report will contain our approaches related
to what place we see for cryptocurrency in the Russian financial
market. I give a hint – we do not see a place for cryptocurrency in
the Russian financial market. Related Reading | Bitcoin
Overtakes Russian Ruble, Inches Closer To Top Ten Global Currencies
Russian Authorities On Top Of Crypto Elvira Nabiullina, the
governor of the Central Bank of Russia (CBR), shows a conservative
and skeptical view when facing the rise of cryptocurrencies. She
has hinted at a ban and recently noted that the CBR is capable of
implementing restrictions. The local news portal finmarket.ru
quoted: Cryptocurrencies carry great risks for retail investors due
to high volatility and use in illegal activities, so we cannot
welcome investments in such assets. Related Reading | To Ban
Or Not To Ban? Russia Concerned About Growing Crypto Transanctions
The head of the bank has stated that the regulator doesn’t see the
possibility of legalizing cryptocurrencies on the country’s
exchanges, but they are studying its other uses. Earlier, Russia’s
Economic Development Minister Maxim Oreshkin had compared bitcoin
investments with gambling and warned that cryptocurrencies imply
many risks for its investors. As for bitcoin: if you look at how
the value of this asset fluctuates, it’s dozens of percent points
up, dozens down. A normal asset that can bring money to eligible
investors should not have such characteristics, since it’s worse
than a casino, On Russia’s Finance Ministry views, the country
should only allow “eligible investors” to do bitcoin transactions
on exchanges. The Deputy Chairman of the Central Bank Vladimir
Chistyukhin has expressed that a solution to their fears would be
to prohibit transferring funds from bank accounts to
crypto-exchanges: I think that we will resolve the issue through
amending the legislation. There will be a more precise definition
of how cryptocurrencies can circulate,
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