Just yesterday, Russian President Vladimir Putin signaled tolerance for cryptocurrencies like Bitcoin for transferring funds. Today, the head of the central bank's financial stability department is assessing the amount of Bitcoin held by local investors.
Bank of Russia's Elizaveta Danilova is in the news today after revealing that she is checking with local cryptocurrency investors to estimate the volume of cryptocurrency investment in the country.
Danilova answered several questions about the risks of bubbles, sanctions and crypto. In doing so, she noted that Russian investment in crypto is a “potentially very significant issue” due to a lack of transparency. She added,
“We need to work both on the data and on raising citizens' awareness of the risks of such investments – nothing supported. We conducted a survey of market participants to get rough estimates of investments in cryptocurrencies. ”
This issue was raised after the executive noted that citizens were unwilling to put their money in banks lately. According to Danilova, despite the COVID-19 pandemic taking hold, nearly 2,6 trillion rubles [US$36 million] were not returned to the banks. The aforementioned amount was withdrawn during the onset of the pandemic.
Meanwhile, different products have not helped in the case of cryptographers in Russia either. According to the head of the department, investing through foreign intermediaries is a challenge and remains a major risk.
Interestingly, Putin expressed a slightly different opinion than regulators everywhere. In a recent interview, the Russian president stated that cryptocurrencies “have a right to exist and can be used as a means of payment”. Given the weight of the 2014 sanctions after the annexation of Crimea, Putin accused the US of using its currency as a weapon. On the face of it, cryptocurrencies might not seem like a bad option.
In fact, China is already trying to fight USD supremacy through its digital currency at the central bank. With Putin backing this effort, we will soon see Russia take some steps in the regulatory direction.
It's worth noting, however, that the president still warned that it's too early to talk about using digital assets to trade in oil and other commodities that account for most of Russia's exports.
While the central bank is evaluating Russian cryptoinvestments, it also urged the government to limit cryptoinvestments by unaccredited investors. This is an effort to avoid “emotional” purchases, concluded the executive.
