Russia’s central bank in talks to ban crypto investments

TL;DR Breakdown:

• Russian central bank wants to ban cryptocurrency investment.
• Recently, the bank prohibited mutual funds from investing in crypto assets.
• Over $5 billion cryptos are traded in the country every year. 

The central bank of Russian is currently in talks with financial experts and market players regarding the prohibition of investments in cryptocurrency across the nation. The new development is coming some days after the central banks issued a new directive banning mutual funds from directly or indirectly investing in digital currency-related assets.

Russia might ban crypto investing

This time, the bank wants to ban local investors from investing in cryptocurrency assets, Reuters reported, citing two financial market sources familiar with the matter. The reason mentioned was the risks cryptocurrency poses to financial stability. If approved, the locals may be stopped from allocating new funds to cryptocurrency. 

In the past, the central bank of Russia held opposing views about cryptocurrency, noting that it can be used for money laundering or terrorism financing. Later in 2020, the nation allowed crypto investing but warned that they could not be used as a medium of exchange within the country. Despite this, the bank issued petition warning brokers from associating with crypto firms. 

No Bitcoin ETF

In October, Elvira Nabiullina, the governor of the Central Bank of Russia, also stated that Bitcoin ETF would not be admitted into the country. Yet, Cryptopolitan reported on November 23 that Russians trade over $5 billion in cryptocurrency every year, and a significant number of the traders use cryptocurrency for hedging. 

Banning crypto could deprive the local traders of this opportunity. The information coming from the sources is even more surprising given that Alexey Moiseev, Russia’s Deputy Finance Minister, said in October that the country has no intention to completely ban cryptocurrencies as China did.