Although Russia has recently passed its first major cryptocurrency laws. The country’s central bank continues to treat the industry as a criminal area.
Sergei Shvetsov, the first deputy governor of the Bank of Russia, has expressed the bank’s negative stance on cryptocurrency investments. He compared cryptocurrency to financial pyramid schemes and roulette games. The official commented on the cryptocurrency industry on Russia’s new bill in the retail investor categories during a live YouTube stream on July 28.
During the live session, Shvetsov emphasized that the Bank of Russia does not recognize cryptocurrency purchases as an investment. He said:
“”The Bank of Russia, as a regulator, maintains that cryptocurrency purchases are not an investment. It is more like a financial pyramid or roulette game and does not apply to the financial market. Government or financial intermediaries should not encourage citizens to buy cryptocurrencies. “
“We do not support investments in this criminal sector”
When comparing cryptocurrencies to “money substitute”, Shvetsov argued that no central bank in the world supports such money substitution. “They are prohibited in the Russian constitution and are subject to criminal liability,” Shvetsov continued.
The executive continued Cryptocurrencies like Bitcoin (BTC) are often used for illegal activities such as money laundering and should therefore not be bank-based. The official said:
“Cryptocurrencies are also used to bypass anti-money laundering regulations, so we don’t support citizens’ investments in this criminal sector at all.”
The main settlement is still ongoing
The Bank of Russia’s most recent comments come shortly after Russian lawmakers passed a major cryptocurrency law, On Digital Assets (DFA), on July 22. However, The EDA law does not provide for actual regulation of the industry. The regulatory framework is expected to be part of another upcoming billtitled “About the Digital Currency”.
By banning the use of cryptocurrencies as a payment method, the DFA bill doesn’t contain much information about cryptocurrency investments. In the meantime, the Bank of Russia has become an important regulator, which is mentioned in the invoice document. It empowers the bank to define what types of investors are authorized to invest in this or that crypto product.
World central banks are fighting cryptocurrencies
Like other central banks around the world, the Russian central bank has been desperate to legalize cryptocurrencies like Bitcoin.
In March 2020 The bank argued that the DFA bill would ban the issuance and circulation of cryptocurrencies in Russia. The bill ultimately proved to be less hostile to the industry. In February 2020, the bank issued a set of rules for suspicious transactions that classified each crypto-related transaction as a potential money laundering risk.
The Russian central bank is not alone in its negative stance on cryptocurrencies. V.Several banks around the world, including the Indian RBI, have tried to ban cryptocurrencies like Bitcoin to take on new decentralized assets.. But even the Indian central bank finally overturned its decision when the Supreme Court lifted the RBI ban in March 2020. Other global authorities that have explicitly banned cryptocurrencies are the central banks of Myanmar and Zimbabwe.