Banning crypto in Russia is ‘quite doable’

In a Friday press conference, Central Bank of Russia governor Elvira Nabiullina further escalated the fear, uncertainty, and doubt (FUD) surrounding the state of crypto regulation in the country. When asked about the rise of digital assets, Nabiullina gave the following remarks, as reported by local news outlet finmarket.ru and translated by Cointelegraph:

You know that our attitude towards cryptocurrencies is of, to put it mildly, skepticism. Related to this are the significant risks for retail investors and the substantial volatility for this type of asset. In addition, cryptocurrencies are opaque in that they are frequently used for illegal operations or criminal nature. Therefore, we cannot welcome investments in them. We seek to prevent the Russian financial infrastructure from using crypto transactions. This is quite doable.

Nabiullina’s remarks came one day after conflicting reports pointed to the possibility of a blanket ban on cryptocurrency exchanges in Russia. As Cointelegraph recently reported, concerns about crypto have even made their way to the presidential office, with Vladimir Putin issuing a warning about digital assets. 

Related: Bank of Russia to ban mutual funds from investing in Bitcoin

In context, countries of the former Soviet Union remain far more susceptible to financial crimes such as money laundering or tax evasion than their Western counterparts. This is because privatization of state enterprises from the breakup of the USSR concentrated power in the hands of individuals who possessed enough “capital” to purchase shares at that time — mafias, gangs, and black-market participants. 

Relatively speaking, the anonymous, borderless, instantaneous, and regulatory-lacking nature of crypto would therefore be a greater enabler of criminal activities in the region. Partly to combat the problem, Russia is prioritizing the development of a regulatory-compliant digital Ruble as a sizable competitor to cryptos developed in the private sector.