The Central Bank of the Russian Federation considers different mechanisms for limiting Russians’ investment in cryptocurrency. A top executive terms cryptocurrency as a pyramid scheme.
Cryptocurrency trading has been flourishing in the Russian Federation in recent years.
According to a study done last year, approximately 77% of investors prefer Bitcoin rather than gold, as reported by the Cointelegraph.
Commercial banks to block cards and wallets
Despite the increasing number of Russian investors’ preference for cryptocurrency, the country’s central bank maintains its strict measures in digital currency. And, is currently focused on starting its digital ruble, expected to start trading in 2022.
To stop Russians from investing in cryptocurrency, lawmakers seek to block card payments to crypto exchanges.
Depending on the services offered by the payment recipients, commercial banks have been compelled to start blocking certain transactions.
While the regulator has advised commercial banks to identify and block e-wallet accounts and cards used by suspicious entities, including crypto exchange service providers, the bank is yet to issue an official advisory statement on its position on cryptocurrencies.
Elvira Nabiullina, the central bank’s governor, considers crypto as one of the highly risky investments that exist.
The Prosecutor General of Russia, Igor Krasnov, said that cryptocurrencies are being used by its people for corruption and other illegal activities.
Sergey Shvetsov, Bank of Russia’s first governor, argued that bitcoin trading is like entering a minefield, expressing his concerns over increasing crypto investments and perceived huge financial losses. He stated that the Russian government will not be responsible for losses incurred by crypto investors.
Differing opinions in crypto regulation
Bank of Russia’s tough guidelines are not supported by other regulating participants.
A meeting held at the State Duma in central Moscow, indicates that other government institutions do not support the financial regulator’s strict stance.
The deputy finance minister, Alexey Moiseev, believes that it’s too late to prohibit cryptocurrency completely since over 10 million Russians have already invested in digital currency. He suggests restricting cryptocurrency buying for non-qualified investors.
Herman Neglyad, the country’s deputy director of Financial Monitoring Service, recommends granting crypto circulation while ensuring strict monitoring and control of the crypto industry’s financial flows and traditional financial systems.
Russia’s financial regulator legalized digital currencies in 2020 but forbade using them as means of payment.
In recent figures, Russians transact close to $5 billion annually in cryptocurrencies, and 46% of retail investors use cryptocurrencies as their financial securities.
The increasing adoption and popularity of Bitcoin trading by the Russians contrast the tough stance taken by the country’s lawmakers, which is similar to Europe’s totalitarian inclination.
The ministry of finance states that banning cryptocurrency would cause panic and create problems among Russians, citing that such a move will term their investments illegal.
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