The Central Bank of the Russian Federation listed the “systemic threats” of cryptocurrencies

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The Bank of Russia published a report for 2021, in which it again pointed out the risks associated with cryptocurrencies.

According to some estimates, the volume of cryptocurrency transactions of Russian citizens reached $5 billion a year, the Central Bank noted.

The regulator believes that the distribution of crypto assets poses risks to the financial stability of the Russian Federation:

“There is a risk of undermining monetary circulation and the loss of the sovereignty of the national currency, as well as increasing risks of the transfer of savings from the traditional financial system to the unregulated segment of crypto-currencies, which threatens to reduce the financial stability of banks.”

The Central Bank noted that the spread of cryptocurrencies in the country and the growth of their prices indicate the formation of a “bubble”. The regulator also reiterated that crypto assets have signs of pyramids, and citizens can lose their investments due to the volatility of rates and the limited legal protection of investors.

The Bank of Russia believes that the further growth of the cryptocurrency market and the involvement of banks in it is fraught with the fact that financial intermediaries will bear “liquidity risk, market risk and credit risk characteristic of cryptocurrencies.”

“Thus, the growing interest of Russian citizens, a significant amount of investments and high risks of transactions with cryptocurrencies create potential systemic threats, in connection with which the Bank of Russia proposed to implement a number of measures to regulate the above risks,” the Central Bank summed up.

Recall that the Central Bank insists on a complete ban on the issuance, circulation and exchange of cryptocurrencies, as well as the organization of such operations on the territory of the Russian Federation.

The Ministry of Finance of the Russian Federation does not agree with such a radical position and proposes to regulate the market; for this, the ministry has developed a separate bill.

Limits on investments and judicial termination of transactions: analysis of the bill “On digital currency”

Nevertheless, the Central Bank continues to talk about the need to ban cryptocurrencies. The sanctions imposed against the Russian Federation due to the invasion of Ukraine also did not soften the position of the regulator in relation to crypto assets.


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