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Bitcoin is ‘Worse than Casinos’, Says Russia’s Economic Development Minister

Last Updated March 4, 2021 5:00 PM
Samburaj Das
Last Updated March 4, 2021 5:00 PM

As Russia prepares regulation for cryptocurrencies, one Russian official has said investments in bitcoin is worse than playing casinos.

Last week, an elite meeting of Russian financial officials and regulators convened with Russian president Vladimir Putin to discuss cryptocurrencies as financial instruments in the country. Putin acknowledged “cryptocurrencies are becoming or have already become a full-fledged means of payment, as well as a means of instrument” in several countries around the world. The Russian president also warned of “serious risks” with cryptocurrency usage by pointing to money laundering and tax evasion opportunities for abusers.

Days later, Russia’s finance minister Anton Siluanov revealed the meeting –attended by central bank governor Elvira Nabiullina, deputy governor Olga Skorobogatova, presidential aide Andrei Belousov and Russian FinTech Qiwi’s CEO Sergei Solonin – also called for an authoritarian control over decentralized cryptocurrencies like bitcoin in the country.

“[W]e agreed that the state should control the process of cryptocurrency emission and its circulation,” Siluanov said. “The state should take control over it.”

To be clear, Russia isn’t banning cryptocurrencies outright but authorities are working toward stringent regulations.

“The state understands indeed that cryptocurrencies are real. There is no sense in banning them, there is a need to regulate them,” Siluanov said earlier in September.

Keeping Bitcoin Away from the People

If Russian Economic Development Minister Maxim Oreshkin had his way, everyday retail investors would be barred from adopting bitcoin altogether.

In comments reported by RT , Oreshkin said:

As for bitcoin, if you look at how the value of this asset fluctuates, it’s dozens of percent up, then dozens of a percent down. An asset that can be available for an unqualified investor should not have such characteristics because it’s worse than casinos. First, you earn, then you will lose everything and be left with nothing.

Oreshkin was speaking at the World Festival of Youth and Students in the Russian city of Sochi when he doubled down on keeping retail investors away from bitcoin, adding:

Those who do not know how to manage risks in instruments with such volatility, should not be able to invest because in 99.9 percent of cases it results in losses for such people and then they will find themselves in a difficult life situation, which is not good.

Oreshkin has also compared bitcoin price volatility with the infamous Russian ponzi ‘MMM’ in recent weeks.

Russia’s deputy minister of finance Alexei Moiseev has expressed similar views in the past, comparing bitcoin to a ‘high-risk financial pyramid’ that should only be available to qualified investors with no access to the general public. According to requirements reportedly proposed by Moiseev, a qualified investor would need to hold at least six million rubles ($100,000) and make at least 40 transactions and trades per year with a turnover of 6 million rubles, or have worked for a financial institution that traded securities for a minimum of two years.

Featured image from Shutterstock.