• Sat. May 21st, 2022

Yeah or Nan? What is Russia’s position on digital currency?

The world of crypto is quite fascinating. If you venture into the cryptography world, you will either be exposed to risk or rewarded with richness. But if you choose your path wisely, you might just be able to hit the jackpot.

This unpredictability, however, divides nations’ stance on digital currencies. Countries like El Salvador, Singapore and Brazil have taken important steps to make it easier for their citizens to adopt digital assets. As countries like China and Russia take the opposite stance and impose strict crypto regulations.

Additionally, the Bank of England recently issued a warning regarding the possibility of Bitcoin becoming worthless.

The Central Bank of Russia also announced new rules and regulations for mutual funds operating in the region, effectively banning mutual fund to invest in cryptocurrencies. This comes at a time when the country’s crypto regulations are still pending.

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What is Russia’s position on cryptocurrencies?

In a recent move, the Central Bank of Russia reaffirmed its opposition to crypto investments, citing the volatility of virtual currencies as one of the main reasons for its cautious stance. Governor Elvira Nabiullina recently said the regulator has the power to control crypto affairs.

Even though the Russian government has “authorized” Russians to own, trade and mine cryptos, citizens are prohibited from using it as a means of payment, i.e. not to be used for payments for goods and services.

Russian State Duma committee chairman Anatoly Aksakov recently said new legislation is needed to protect retail investors from crypto risks.

Aksakov said,

“Digital assets are the subject of our special attention, and here we will look at how to protect our citizens as much as possible when investing in digital currencies and digital assets, because it is a new tool and it is enough difficult for an unqualified. investor.”

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What steps has Russia taken to stifle the crypto market?

At the moment, the future of Russia’s cryptocurrency seems unclear. The bank, which serves as Russia’s chief regulator, is preparing to separate cryptos from traditional financial institutions by enforcing strict policies. Here are some initiatives that serve to thwart a crypto boom in Russia.

  • In July, the CBR banned the country’s stock exchanges from listing any financial instrument whose value is determined by crypto prices. Regulators now want to restrict the involvement of mutual funds in cryptos.
  • The Bank of Russia made an official statement regarding the regulation of mutual funds on December 13.
  • Fund managers are prohibited from investing in cryptos and financial instruments whose value depends on the price of digital assets, according to the document. Neither unqualified nor qualified investors are allowed to invest in cryptocurrency through mutual funds.
  • Holding undeclared cryptocurrency worth US $ 1,300 to US $ 13,000 in Russia is punishable by fines and even imprisonment.

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Last month, the CBR released a review of the Financial Stability Report. The CBR highlighted in the report the significant risks in the crypto market, citing a lack of financial stability and investor protection, as well as the potential for an increase in cases of money laundering and criminal financing.

In addition, the CBR has asked commercial banks to block crypto cards, wallets and accounts of people who engage in fraudulent activity.


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Future prospects

The Central Bank of Russia (CBR) is taking a hard line against the digital asset market in Russia. Therefore, the fate of cryptos in Russia seems a bit hazy. The Bank of Russia’s most recent move to protect the country’s economy from fraud and scams came as a shock to Russian crypto enthusiasts.

However, despite restrictions on traditional financial institutions’ participation in cryptos, the Bank of Russia intends to develop a ruble-backed central bank digital currency (CBDC). If all goes according to plan, the digital ruble pilot program will start next year.

So, maybe all is not lost for Russian crypto enthusiasts.

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