As recently as yesterday, Russian President Vladimir Putin noted the tolerance of cryptocurrencies like Bitcoin to transfer funds. Today, the head of the central bank’s financial stability department assesses how much Bitcoin is held by local investors.
The Bank of Russia’s Elizaveta Danilova is making headlines today after revealing that she is consulting with local cryptocurrency investors to estimate the volume of cryptocurrency investments in the country.
Danilova answered several questions about the risks of bubbles, penalties and encryption. In doing so, he noted that Russian investment in crypto is a “potentially very important issue” due to a lack of transparency. She added,
“We have to work with data and also educate citizens about the risks of such investments, without the support of anything. We conducted a survey of market participants to get rough estimates of cryptocurrency investments. "
This issue was raised after the executive pointed out that citizens were recently unwilling to put their money in banks. According to Danilova, even as the COVID-19 pandemic sets in, nearly 2.6 trillion rubles [$ 36 million] has not been returned to the banks. The aforementioned amount was withdrawn at the start of the pandemic.
Meanwhile, the different products also didn’t help in the case of cryptographers in Russia. According to the head of the department, investing through foreign intermediaries is a challenge and remains a significant risk.
Interestingly, Putin expressed a slightly different view than regulators around the world. In a recent interview, the President of Russia claimed that crypto “has a right to exist and can be used as a means of payment.” Faced with the weight of the 2014 sanctions following the annexation of Crimea, Putin accused the United States of using its currency as a weapon. At first glance, encryption may not seem like a bad option.
In fact, China is already trying to fight the supremacy of the USD through its digital currency at the central bank. With Putin backing this effort, we will soon see Russia take regulatory action.
However, it should be noted that the president has always warned that it is too early to talk about using digital assets to trade oil and other commodities that make up the bulk of Russia’s exports.
As the central bank assesses Russian crypto investments, it has also urged the government to limit crypto investments by unaccredited investors. This is an effort to avoid “emotional” purchases, the executive concluded.