The monetary authority in Moscow has re-emphasized that the spread of cryptocurrencies presents significant risks to Russia’s economy, financial stability and national currency. The central bank has reaffirmed its tough stance on decentralized digital currencies in a newly published report as the government prepares to regulate the Russian crypto space.
Russia’s Central Bank Issues Cryptocurrency Warning
The Central Bank of Russia (CBR) has pointed to the growing interest of the people in cryptocurrencies, their important crypto investments and the high risks associated with crypto-generating activities. potential systemic threats, the Central Bank of Russia (CBR) pointed out in its annual report for 2021. Expanding on a long list previously, the Monetary Authority has outlined specific criteria. poles related to digital currencies like bitcoin.
There is a risk of undermining currency circulation and losing sovereignty over the national currency.
The regulator is echoing earlier warnings that digital assets increase the risk of money outflows from the traditional financial system to the largely unregulated crypto market. The CBR said this transfer of savings threatens the financial stability of Russian banks, cited by RBC Crypto.
The Central Bank of Russia is still concerned about the “happiness of its citizens” because, in their view, the development of the cryptocurrency market creates a bubble while cryptocurrencies have the characteristics of a financial pyramid. . Investor protection is limited and digital currency investments may be lost due to price fluctuations or to fraud and cyber threats, the CBR added.
The report comes after in January the central bank proposed a ban on most crypto activities. Its tough proposal has been met with resistance from other government organisations. In February, the CBR presented legislation banning cryptocurrencies. However, this is unlikely to win support as a growing number of officials in Moscow now see an opportunity to use crypto assets to circumvent Western sanctions imposed over the invasion of Russia. Russia into Ukraine.
The Treasury Department has been leading efforts to legalize cryptocurrency activities, excluding payments in bitcoin, and recently sent back the new bill “On Digital Currency” to the federal government for support. support its approach. The draft law now contains provisions regulating cryptocurrency mining. Meanwhile, the Central Bank of Russia also said it could accept the legalization of the industry.
The central bank further noted that according to some estimates, the volume of cryptocurrency transactions conducted by Russian residents reached $5 billion last year. Russians are already actively trading on digital asset exchanges and their country ranks among the world’s leaders in digital currency mining capacity, the regulator has admitted.
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