The Russian central bank is now working with commercial banks to delay payments on digital asset exchanges. The move aims to limit “emotional” cryptocurrency purchases by “unqualified” Russian investors, a CBR official said. The move will likely affect peer-to-peer and over-the-counter trading platforms.
Central Bank of Russia skeptical about cryptocurrency investments
The Bank of Russia remains skeptical of the acquisition of cryptocurrencies and will not support increasing access to crypto markets for Russian investors, most of whom are not accredited, the bank’s vice chairman Sergei Shvetsov said this week, quoted by the business news agency Prime. At the international banking forum “Banks of Russia – XXI Century” the senior official stated:
When it comes to buying [cryptocurrency] for investment purposes, we are skeptical of this idea. We believe it is different from traditional assets, it is very risky and shows signs of a pyramid scheme.
Shvetsov reiterated the Central Bank’s “clear position” that the only means of payment in the Russian Federation was the “ruble in all its forms and not any kind of monetary surrogate or foreign currency”. The Treasury is preparing to roll out a digital ruble prototype by the end of the year and hopes the CBDC will help curb the use of cryptocurrencies in Russia.
During the event in Sochi, Shvetsov said that the Bank of Russia is working with commercial banks to delay payments to cryptocurrency exchanges. The CBR recently recommended banks to block cards and wallets used for transactions with crypto exchangers. The aim is to limit the chances of impulsive purchases of crypto assets, noted the deputy head of the regulator. Quoted by RIA Novosti, the banker stated:
We’re starting to work with the banking system to slow down payments in favor of bureaux de change and cryptocurrency exchanges, and to stave off the opportunities for emotional purchases of these types of products.
Sergei Shvetsov noted that despite some governments taking steps to legalize cryptocurrencies, concerns remain that this type of monetary system could collapse completely. “There is a high likelihood that all of this can fall to zero as a high-tech financial pyramid,” he warned, adding that there could be hundreds of reasons why this could happen. “From our point of view, this is a large minefield,” said the central bank official.
CBR restrictions violating the rights of Russians, says legal expert
However, Shvetsov’s comments have raised other concerns – those of those working in the Russian crypto space. Just talking about imposing restrictions sends an extremely negative signal and the consequences could be catastrophic for the country’s crypto market, Nikita Zuborev, senior analyst at popular stock market aggregator Bestchange.ru, told Forklog. He also warned:
The most affected segment will be OTC trading with registration in the Russian Federation – exchange offices and users of P2P platforms. The miners will also be forced to look for workarounds to keep the farms running, selling the mined coins for rubles will be problematic.
According to Andrey Tugarin, Managing Partner at GMT Legal, it would be illegal to restrict bona fide transactions for the purchase of cryptocurrencies. “The current law on digital financial investments allows every citizen of the Russian Federation to own, buy or sell a digital currency, i.e. Bitcoin, and use it as an investment. And this right applies regardless of whether the buyer is a qualified investor or not, ”stressed Tugarin.
The good news for now is that Exmo, a popular cryptocurrency exchange in the region, has not seen a drop in deposit volume from Russian users in the past few weeks. In fact, Russian trades on the platform actually increased during the recent market correction, said Maria Stankevich, Exmo’s chief business development officer.
Do you think the Bank of Russia will manage to contain Russian cryptocurrency investments? Do share your thoughts on the matter in the comments below.
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source https://www.bisayanews.com/2021/09/19/bank-of-russia-to-slow-down-payments-to-crypto-exchanges-curb-russians-impulsive-investments-regulation-bitcoin-news/
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