According to data from the Central Bank of Russia, Russians are making billions of dollars in crypto transactions each year due to the increasing capitalization of crypto economies. According to the regulator, Russians make up the largest number of active users in the cryptocurrency market.
Russians among the Most Active Cryptousers, Central Bank Admits
True to its hardline stance on decentralized digital money, the Central Bank of Russia (CBR) has recently stated that cryptocurrency operations “carry significant risks for financial stability and investors as well as climatic risks.” The warning has been issued with its Financial Stability Overview for the second and third quarter of 2021.
According to the monetary authority, the market capitalization has seen a rapid increase this year. Forklog quoted its analysis as indicating that increased interest by investors in technology such as smart contracts and blockchain has been a major factor in rising cryptocurrency prices.
The financial regulator admitted, citing various analyses that Russian Federation residents are some of the most active users in crypto-space. Russians are among the top cryptocurrency users. Russia is one of the leaders in terms of number of visits on Binance, the world’s leading crypto exchange.
According to data gathered by major financial institutions, Bank of Russia estimates that Russians make around $5 billion in digital currency transactions each year. CBR however notes that cryptocurrency’s anonymity makes them more attractive for criminal activities like money laundering or terrorist financing.
The Russian Federation’s central bank has repeatedly rejected legalization of cryptocurrency in Russia as a legal tender. It also pointed out other risks, such as the possibility of fiat savings being converted into crypto assets. Due to volatility in cryptocurrency’s prices, the CBR regards cryptocurrencies as unreliable stores of value.
Regulators are also concerned about the high energy consumption of bitcoin mining. Russia’s rich energy resources make it an appealing destination for bitcoin miners. Some of Russia’s provinces with low electricity rates have called for regulation. Moscow officials are increasingly convinced that mining should become an entrepreneurial enterprise and be taxed accordingly.
Bank of Russia points out that the relationship between digital currencies and traditional financial sectors is still limited. But at the same time, the authority believes that the spread of cryptocurrencies creates more and more risks for Russia’s financial market and insists on the need for improved monitoring.
Is there a way Bank of Russia might change its position on cryptocurrencies in the near future? Please let us know what you think in the comment section.
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