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Russia’s Central Bank Issues Cryptocurrency ‘Bubble’ Warning [Rinse, Repeat]

Last Updated March 4, 2021 5:02 PM
Samburaj Das
Last Updated March 4, 2021 5:02 PM

The Central Bank of Russia has warned investors of risks surrounding cryptocurrencies in a report released on Tuesday.

According to state-owned news agency TASS , the latest ‘Financial Stability Report’ from Russia’s central bank has called on investors to be wary of a cryptocurrency market ‘bubble’ that could lead to losses.

An excerpt from the report, according to TASS read:

A ‘bubble’ on the cryptocurrencies market may result in substantial losses for consumers. Also, there are risks that cryptocurrencies are used for money laundering and financial terrorism.

The report also outlined a coordinated approach between ‘national and supranational regulators…[for the] regulation of the cryptocurrencies market and restricting the potential of high-risk investments and transactions.”

The warning, via the report, follows a recent public notice from the central bank in September centered on initial coin offerings (ICOs) and cryptocurrencies. Russia’s central bank first issued a warning on cryptocurrencies in early 2014, setting the precedent for a hostile stance that, until recently, had authorities pressing for laws that would criminalize and even imprison bitcoin adopters.

More recently, the central bank’s first deputy governor Sergei Shvetsov’s threatened to block access to bitcoin exchange websites altogether, citing “unreasonably high risks” for citizens investing in cryptocurrencies. Earlier this month, Russia’s minister for communications and mass media Nikolai Nikiforov absurdly summed up bitcoin as a “foreign project” that will not be considered as a legal entity in Russia.

However, Russian president Vladimir Putin has personally mandated the country’s prime minister and the head of the central bank the  to draft a framework to regulate initial coin offerings and cryptocurrency mining operations, as well making a call to determine cryptocurrencies’ legal status in the Russian Federation, before a July 2018 deadline.

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