Key Takeaways:
- Bank of Russia might restrict crypto investments.
- Elvira Nabiullina, the governor, recently stated that the regulator has the power to limit them.
- Russia’s monetary authority does not encourage Russian citizens to invest in cryptocurrencies, according to Elvira Nabiullina.
The Russian Central Bank has reiterated its opposition to cryptocurrency investments, citing the volatility of digital assets as a key reason for its cautious stance. Elvira Nabiullina, the governor, recently stated that the regulator has the power to limit them. As a result, Russia’s monetary authority does not encourage Russian citizens to invest in cryptocurrencies, according to Elvira Nabiullina, the head of the Central Bank of Russia (CBR), who spoke about it in online press conference this week. She cited the regulator’s stance due to their volatility and potential use in criminal activity.
The governor also mentioned the Bank of Russia’s position that cryptocurrency transactions should not be made using Russian financial infrastructure. She emphasised that the regulator has the authority to impose restrictions and reaffirmed the bank’s scepticism of these assets. The chair of the Russian central bank elaborated it by saying,
“Cryptocurrencies carry great risks for retail investors due to high volatility and use in illegal activities, so we cannot welcome investments in such assets.”
Nabiullina’s comments follow news that Russian authorities are debating between two very different approaches to regulating cryptocurrencies and related activities, according to media reports. The State Duma is developing rules for coin mining and exchange, while the Bank of Russia attempts to prohibit crypto purchases. Despite the CBR’s opposition to cryptocurrencies’ free circulation, including their use in payments, these will legalise them.
Earlier this week, it was reported that sources close to the CBR said the monetary authority is in talks with market participants about a potential ban on Russian investors buying crypto assets in the future. One of them revealed that the central bank’s current stance on cryptocurrencies is one of “complete rejection.” Experts have warned that such a move would drive crypto investors underground, making it impossible for the government to collect taxes.
According to Anatoly Aksakov, the head of the parliamentary Financial Market Committee, lawmakers are considering legalising cryptocurrency trading, which would allow for the taxation of related profits and incomes. According to Aksakov, the State Duma has already passed a draught law to tax crypto transactions in the Russian Federation in the first reading. Last December, the House of Representatives introduced the bill, which recognises digital currencies like bitcoin as property for tax purposes.
According to reports, investors may flee if the Russian government and Bank of Russia go completely against cryptocurrency. This will make collecting taxes from investors extremely difficult, if not impossible. In addition, the government will lose a significant amount of money as a result of this. Therefore, a better approach is to have proper regulation, which will allow users to stay safe while filing their taxes and incomes correctly.
