Central Bank of Russia looks into crypto investments

Central Bank of Russia looks into crypto investments

In an interview with news organisation Reuters last October 14, the Central Bank of Russia’s head of financial stability department Elizaveta Danilova said that they are looking into cryptocurrency investment volumes in Russia. She added that they needed to assess the amount of Bitcoin (BTC) that is held by local investors after they withdrew their money during the peak of the COVID-19 situation.

CBR’s efforts to analyze the crypto investment volumes in Russia were done since most Russians chose not to put money back into their bank accounts as of late as read in the report by crypto news site Cointelegraph last October 15. In her interview with Reuters, Danilova said that up to 2.6 trillion rubles or $36 million have not been returned to banks after the large withdrawals in 2020 because of the pandemic.

On another hand, Danilova shared that they need to work on finding data and raising awareness about the risks of crypto investments ‘which are backed by nothing’ in the same interview which was published on their official website. She pointed out that the crypto market lacks transparency and highlighted the dangers of crypto derivatives products such as exchange-traded funds. Moreover, Danilova expressed the problem of cross-border transactions which could be potentially threatening since it allows people to trade crypto with foreign intermediaries.

Subsequently, Russia’s Association of Forex Dealers (AFD) released the results of their survey about investors’ behaviours about digital currencies and green finance which was conducted from August 4 to August 24, 2021, on their official website last August 31. They found that 77% of their 502 respondents prefer to invest in BTC rather than traditional alternatives such as gold and forex.

Although crypto is widely popular in Russia, the CBR still hopes that the government limits crypto investments in the country. They suggested that there should be a directive that slows down transactions in crypto exchanges to refrain from more crypto purchases.

Meanwhile, the current President of Russia, Vladimir Putin sees cryptocurrencies like BTC in a different way. During his interview with the American-based channel Consumer News and Business Channel (CNBC) last October 14, he said that crypto is great for transferring funds internationally. But when it comes to trading such as relating to energy resources, he believes that it’s still premature.

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