Bank of Russia will slow down” payments to crypto exchanges and curb impulsive investments by Russians – regulation

The Central Bank of Russia is now working with commercial banks to delay payments to digital asset exchanges. The move aims to limit “emotional” cryptocurrency purchases by “unqualified” Russian investors, a CBR official revealed. The move is likely to affect peer-to-peer and over-the-counter trading platforms.

Central Bank of Russia skeptical about cryptocurrency investments

The Bank of Russia remains skeptical about acquiring cryptocurrencies and will not support increasing access to crypto markets for Russian investors, most of whom are not accredited, the bank's deputy chairman Sergei Shvetsov said this week, quoted by business news agency Prime. At the international banking forum “Banks of Russia – XXI Century”, the senior official stated:

When it comes to purchasing [cryptocurrency] for investment purposes, we are skeptical about 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 is the "ruble in all its forms, and not just any kind." monetary surrogates or foreign currencies.” The tax authority is preparing to introduce one digital ruble Prototype by the end of the year and it hopes that 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 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 explained:

We are starting to work with the banking system to slow down payments in favor of currency exchanges and cryptocurrency exchanges and prevent 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 probability that all of this could 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 perspective, this is a big minefield,” the central bank official stressed.

CBR restrictions violating Russians' rights, says legal expert

However, Shvetsov’s comments have raised other concerns – those of people operating in the Russian crypto space. Just talk of imposing restrictions sends an extremely negative signal and the consequences could be disastrous for the country's crypto market, said Nikita Zuborev, senior analyst at popular exchange 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. 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 Assets' allows any citizen of the Russian Federation to own, buy or sell a digital currency, that is, Bitcoin, and use it as an investment. And this right applies regardless of whether the buyer is a qualified investor or not," Tugarin emphasized.

The good news at the moment is that Exmo, a popular cryptocurrency exchange in the region, has not seen a decline in deposit volumes from Russian users in recent weeks. In fact, Russian trades on the platform actually increased during the recent market correction, Exmo Chief Business Development Officer Maria Stankevich revealed.

Do you think the Bank of Russia will succeed in curbing Russian cryptocurrency investments? Share your thoughts on this topic in the comments below.

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