It should be noted that the topic of cryptocurrencies at the government level in Russia has been touched upon quite often recently. For example, earlier this week, the Central Bank proposed expanding the number of assets that mutual funds can invest in. However, at the same time, mutual funds were banned from investing in cryptocurrencies. The bankers also remembered to mention that the Bank of Russia had previously directly recommended against investing in digital assets.

What will happen to cryptocurrencies in Russia?

Information about a complete ban on crypto-investments was published by Reuters. Journalists point out that there are growing concerns in the ruling circles of the Central Bank regarding terrorist financing and money laundering through cryptocurrencies.


Note that this version is still actively promoted by officials, bankers and other fans of the traditional niche economy. At the same time, even former CIA chief Michael Morell stressed this year that it is trivial for criminals to use cryptocurrencies. After all, every transaction they make is stored in the blockchain forever, and wallet balances and activity are also available to anyone who wants to use them.


Earlier, the State Duma passed the Digital Assets Act, according to which crypto cannot be used as a legal means of payment within the country.

Bitcoin’s status in the Russian Federation is still uncertain

It is worth noting that so far the above information is only confirmed by rumours. While some sources speak of a ban on purchases of new tokens, others claim “total non-recognition” of Bitcoin and altcoins in Russia. How could this threaten individual crypto-investors? They are likely to have difficulty dealing with cryptocurrency exchanges and other coin exchange platforms.

According to the central bank, the annual volume of cryptocurrency transactions by Russians is around $5 billion. Ksenia Yudaeva, first deputy governor of the central bank, said this month that the growing popularity of cryptocurrencies has raised concerns about risks to financial stability. Here’s a rejoinder from the Central Bank spokeswoman, in which she shared her perspective on what’s happening.

The situation in developed market countries increasingly resembles the so-called shadow financial system.

In essence, the government is not happy with the lack of tools to control what happens in blockchain. Yet anyone can make a transaction on decentralised networks like Bitcoin and Etherium - and no one can stop them from doing so. The only exception would be in the case of exchanges, which are a centralized structure. There, too, it might be difficult to withdraw funds if necessary.

Yudaeva referred to China’s experience and noted that Russia needs further adjustments to cryptocurrency regulation. Recall that in September, China intensified its crackdown on digital asset owners by imposing a complete ban on all cryptocurrency transactions and mining. It is now essentially forbidden to interact with digital assets within the state.

Cryptocurrency hacker

Meanwhile, a new report from analyst firm Chainalysis has published statistics on cryptocurrency hacking activity in 2021, which indirectly confirms officials’ fears. The figures could indeed cause a backlash against crypto: according to experts, the “revenue” from digital asset fraud is up 81 per cent year-on-year. Since January 1, its volume worldwide was more than $7.7 billion – almost 1.5 times the volume of crypto transactions in the Russian Federation.

The volume of crypto fraud “earnings” in previous years


Overall, we believe that the Central Bank's initiative to ban digital assets altogether is unlikely to yield the results officials expect. Such radical restrictions will only encourage the development of shadow operations with crypto, which will add headaches for financial regulators in the country. This means that the situation is unlikely to be resolved for the better.

The experience of other countries is quite capable of correcting it. We are talking about clear regulation and not too difficult taxation. However, these solutions are yet to come.


What do you think about it? Share your opinion in our Millionaire Crypto Chat. There we will talk about other topics related to the world of decentralisation and digital assets.