The growth of cryptocurrencies poses serious dangers to Russia’s economy, financial stability, as well as its national currency Ruble, according to the monetary authorities from the Central Bank of Russia. In a recent study released, the Central Bank of Russia (CBR) maintained its strong position on decentralised digital money as the Russian government prepares to regulate the crypto industry.
Central Bank of Russia warnings regarding cryptocurrencies
The Central Bank of Russia has stated in its annual report for 2021 that Russians’ rising interest in cryptocurrencies, their considerable crypto investments, and the high risks connected with crypto activities pose serious systemic dangers. The monetary authority warned that there is a risk of weakening the flow of money and loss of national sovereignty for the Ruble. It has also highlighted many of the previously noted disadvantages associated with digital currencies.
According to it, digital assets raise the danger of cash flowing out of the established banking system and into the mostly unregulated crypto market. This transfer of money endangers the financial stability of Russian institutions. The Bank of Russia is still concerned about the well-being of citizens, as it sees the crypto market’s expansion as becoming a bubble. Investor safety is inadequate, and investments in digital currency can be lost as a consequence of market fluctuation, fraud, and cyberthreats.
Russia’s cryptocurrencies regulation journey
The revelation comes after the central bank proposed a ban on most crypto operations in January to which various government entities within Russia responded negatively. Then, CBR proposed laws limiting the use of cryptocurrency in February. However, it is unlikely to gain traction since a rising number of authorities in Moscow regard crypto assets as a way to get through Western sanctions imposed in response to Russia’s invasion of Ukraine.
