Russian Central Bank: everything must be done to protect Russians from cryptocurrency market risks

Cryptocurrencies carry high risks for the financial well-being of citizens and national economy stability, therefore they cannot be legalized, says the head of the Central Bank of the Russian Federation, Elvira Nabiullina.

Nabiullina negatively assessed the consequences of the adoption of the concept developed within the walls of the Ministry of Finance.

“The discussion is yet to come. We see threats to the well-being of citizens, financial stability, and the financial market posed by cryptocurrencies. The concept of the Ministry of Finance speaks of the advantages of legalization. We doubt it,” Nabiullina said at a press conference on 11 February. According to her, the approaches proposed in the concept of the Ministry of Finance not only do not reduce existing risks, but also create new ones. “One of the main questions is that it says that we have a high level of involvement in this market and therefore we need to legalize it. It seems to me that the fact that our citizens are so intensively involved in this market means that we need to make another decision and make it faster.” She added, “everything must be done to reduce the involvement of people in this market.”

Nabiullina compared cryptocurrencies in terms of the level of risk for the population with foreign currency mortgages, which were previously common in Russia among the population. Until 2014, foreign currency mortgages were popular among Russians due to the fact that the interest rate on such a loan was quite low. But after the sharp depreciation of the ruble in 2014, borrowers were faced with the fact that their loan rose sharply in price, because the loan was taken on the basis of the old exchange rate. Many could not pay mortgages that rose in price, and mortgage housing was transferred to the bank.

“Then the question arose why it was not banned, these problems had to be solved by the government, the Central Bank, while the scale was much smaller than with cryptocurrencies.”

Nabiullina believes that the legalization of cryptocurrencies will increase the volume of money laundering through digital assets. “For many years we have been fighting against illegal operations in the financial sector, withdrawing from the market the players who are involved in money laundering into cashing out. Cryptocurrency, by its very nature, will open up a massive new channel for such transactions.”


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