Bank of Russia skeptical about crypto in the face of flourishing local market

A top executive in the country’s crypto industry recently remarked that the Russian market was worth half a trillion 

Russians have been actively transacting digital assets for a while now, as per the figures in a freshly released report from the Bank of Russia. The top bank yesterday published the results of an assessment of the nation’s financial stability, noting that the country had significantly contributed to the global cryptocurrency sector.

The world’s combined cryptocurrency market value set a record peak close to $3 trillion in the first week of November following the Bitcoin and Ether rally. It, however, dipped afterward as the market took a tumble and is currently zeroing in on $2.7 trillion, according to coinmarketcap.

The review detailed that as per data estimations sourced from the local banks at the end of the first half of the year, Russians transact about 350 billion rubles (translating to about $5 billion) each year. It is worth noting that there is some vagueness in the data, as the bank didn’t clarify if the reported figures had taken into account the price upswing of crypto assets during the period between July and November.

Russians are also active on Binance

The published document further highlighted the activity of Russians on the Cayman Island-registered exchange Binance. The central bank noted that the locals were among the frequent visitors of the exchange, which leads the way in terms of the daily crypto trading volume. This is backed by data from a New York-based analytics firm that ranks Russia as the country with the second-highest traffic on Binance.

China’s harsh stance on all activities related to cryptocurrencies, including mining, turned tables in regional mining dominance. Russia is now among the countries heavily invested in Bitcoin mining alongside the US. The European country sits third in the national hash rate as per data from the Cambridge Bitcoin Electricity Consumption Index.

The Bank of Russia is reluctant to vouch for crypto adoption

The Russian crypto market boom comes amid great scepticism on crypto assets from the Bank of Russia. Notwithstanding the positive figures from the country, the Russian central bank is not yet convinced digital assets are suitable for the economy.

The institution expressed its worry over citizens taking up crypto assets, arguing that the assets carried a lot of risks, including terrorism financing and money laundering. The bank additionally noted that crypto assets are a risk to the financial stability – a take shared by other governments like India and bodies such as the European Union.

It previously urged the local banks in the country to support its digital currency, going as far as banning them from dealing with cryptocurrencies in the process. Despite the bank’s position on digital assets in the report, it did not provide recommendations to address the crypto situation. Instead, it will be focused in keeping tabs on the region’s market for any suspicious activities.