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Intro: The governor of Bank of Russia has taken a tough stand against cryptocurrency and feels that crypto is one of the most dangerous investments currently. She said this despite the increasing criticism of how the bank is handling the digital asset regulation.
The Bank of Russia has a very tough stand against cryptocurrency and the bank has advised people of Russia to not invest in cryptocurrency. However, the Russians believe that this tough stance by the bank is losing their chances to try their hands on the digital asset industry.
Now the Governor of the Bank of Russia Elvira Nabiullina in an interview with Komsomolskaya Pravda argued that the Bank’s stance on cryptocurrency is much needed as crypto is one of the most dangerous investments currently exist.
Crypto vs Foreign exchange
Comparing crypto with foreign exchange markets, Nabiullina mentioned crypto as a high-risk investment. She said that it is far easier to lose than to win in the foreign exchange market. Hence, speculative crypto assets are more riskier than the foreign exchange as they are volatile in nature and mostly fake.
Since the prices of cryptocurrencies are volatile, it is much riskier and at the same time easy to lose money. The losses can be tremendous. So, the Bank of Russia does not recommend anyone to invest in cryptocurrencies.
The governor has earlier also said that cryptocurrencies and especially Bitcoin are fake currency. It should not be used for settlements in Russia. In 2017, she had compared the increasing popularity of cryptos with the gold rush.
Digital Ruble over cryptocurrencies
Nabiullina is very sceptical about cryptocurrency but she is very optimistic about the digital Ruble. It is the Bank of Russia’s central bank digital currency project. She mentioned last year that the digital ruble is promising and that it will help businesses by cutting out financial intermediaries.
Influential Russians criticize Bank of Russia
But there are certain influential people from Russia who are very critical of the Bank of Russia’s stance on cryptocurrency. One of the state Duma members has accused the central bank of being short-sighted on the industry. Another industrial Russian tycoon Oleg Deripaska has also accused the central bank of its hesitance in recognizing cryptocurrencies.
In the latest string of news, Deripaska on his official Telegram channel blasted the Russian Central Bank for pressuring the crypto industry not to get involved in cryptocurrencies like bitcoin.
He is of the view that Russia needs to adopt Bitcoin to provide a real financial instrument that will give independence in foreign trade settlements.
He also said that even a small country like El Salvador has given the legal status to Bitcoin and that Russia is still skeptical about the adoption. He further pressed that a poor country like El Salvador has realised the need for digital currencies and taken a simple path, recognizing bitcoin as a means of payment.
He further criticized the central bank for its non-committal response to the crypto industry development, particularly the bank’s statement regarding the digital ruble. He explained that banks should devise a mechanism to provide freedom in foreign trade settlement.
Why Russia taking a tough stance
Though Russia has allowed crypto trading yet it did not allow local banks to offer crypto services. Tinkoff, a major private bank in Russia, is struggling to offer cryptocurrency to its clients because of the central bank’s tough stance on cryptocurrencies.
Oliver Hughes, CEO, Tinkoff said that digital bank is willing to offer crypto trading services but is restricted by the Bank of Russia’s policy. Hughes said that the demand to invest in cryptocurrencies is increasing. But he said that still there are certain concerns like money laundering, frauds, and high volatility risks. But he is hopeful that with time these concerns will also be taken care of.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
