As the interest for cryptocurrency investments continues to grow in Russia, the Central Bank of Russia (CBR) has advised domestic banks to delay payments made to crypto exchanges. First deputy chairman of the CBR Sergei Shvetsov stated that the move aims to curb emotional crypto purchases made by unqualified Russian investors.
He expressed deep concerns regarding the possibility of the crypto market crashing to zero, eventually leading people to bankruptcy.
‘There is a high probability that, as a high-tech financial pyramid, this all can fall apart to zero. Why will it fall apart when it falls apart? There may be hundreds of reasons why, there may be tens and hundreds of answers why this will not happen. From our point of view, this is a large minefield,’ said Shvetsov during a speech at the international banking forum.
However, Shvetsov’s comments have garnered negative reactions, especially from people involved in the crypto market.
According to Bestchange.ru senior analyst Nikita Zuborev, the restrictions imposed by CBR could have catastrophic consequences in the country’s crypto sphere and violate Russians’ rights.
‘The most affected segment will be OTC trading with registration in the Russian Federation – exchange offices and users of P2P platforms. Miners will also be forced to look for workarounds to keep farms in operation, selling the mined coins for rubles will be problematic,’ Zuborev told Forklog, a magazine about the cryptocurrency market.
This recent anti-cryptocurrency regulation was made after the Central Bank of Russia urged commercial banks to identify and block crypto accounts and e-wallets involved in fraudulent activities.
Moreover, the banking authority has issued a wide range of criteria to identify crypto accounts operating in the shadow economy. This includes a large number of senders or receivers, 30 cash deposits and withdrawals and frequent transactions amounting to 100,000 Russian rubles a day.
This is not the first time the Bank of Russia has shown reluctance in embracing the cryptocurrency industry. In 2019, the central bank deemed cryptocurrency to be highly risky since it could be used to launder money and finance terrorism due to its overall lack of regulations and transparency.
In July 2021, the CBR also implemented new regulations that urged Russian stock exchanges to avoid listings of foreign companies offering crypto services.
However, the country does not stop there as it embraces stricter restrictions similar to China. Rosfinmonitoring, Russia’s financial monitoring agency, has commissioned the launch of a new system that aims to potentially track and identify the activities and behaviour of crypto investors.
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