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
Although cryptocurrencies are legally recognized in Russia, they cannot be used in payment systems in Russia. Officials have opposed this view, pointing out that cryptocurrencies could be used for money laundering or finance terrorism. The law “On Digital Financial Assets” entered into effect this year and regulated a few activities.
Even though there have been warnings that the Russian crypto market could be banned, it has shown 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.
Some reports claim that 5 trillion rubles has been already invested in crypto by Russians.
In the near future, this crypto Russian boom may face significant obstacles.
Aksakov recognized that investors from all walks of the spectrum, even common Russians, now have an interest in crypto markets. 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.”
The authorities have taken some precautions against high-risk investment for those with poor financial literacy who are attracted to crypto markets.
In the meantime, however, Russian crypto investors are not provided with enough clarity and authorities send mixed signals as to 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.
It is likely that we will publish soon a report regarding cryptocurrencies. The report will include our views on where cryptocurrency should be placed in Russia’s financial markets. I give a hint – we do not see a place for cryptocurrency in the Russian financial market.
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Russian Authorities on Top of Crypto
Elvira Nubullina, governor of Central Bank of Russia, is cautious and skeptical about the rise of cryptocurrency. Although she suggested that a ban might be implemented, the CBR has recently stated that it is capable of restricting access. According to finmarket.ru, the following was quoted by local media:
Retail investors are at great risk from cryptocurrencies due to their volatility and illegal use. We cannot accept investments in these assets.
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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.
Vladimir Chistyukhin (Deputy Chairman Central Bank) stated that it would solve their concerns if funds could not be transferred from bank accounts to cryptocurrency-exchanges.
We will solve the problem by amending the law, I believe. It will provide a clearer definition on how cryptocurrency can be circulated.