​Ponzi scheme, replacement of the ruble and other threats. Russia’s Central Bank criticized cryptocurrencies again

What’s new? Ksenia Yudaeva, Deputy Chairman of the Central Bank, responded to a number of points of the package of proposals on the regulation of the crypto market in Russia, compiled by State Duma Deputy from United Russia Anton Gorelkin following the roundtable discussion in March. The event was attended by the representatives of crypto exchanges, the Ministry of Finance, and the expert community. The participants of the event suggested introducing a preferential taxation regime for cryptocurrencies and converting digital assets into the Russian ruble. In their opinion, such measures will help minimize the impact of sanctions.

Ponzi scheme. Yudaeva believes that the legalization of cryptocurrency circulation will create favorable conditions for the large-scale growth of Russians’ investment in the highly speculative instrument, which is actually a Ponzi scheme. Digital assets are often used by attackers, the First Deputy Chairman noted. Such a prevalence of scams in cryptocurrency trading can lead to citizens losing a significant portion of their savings. According to the regulator, cryptocurrencies are also actively used in illegal activities, which may pose a challenge to the global system of countering the laundering of proceeds from crime and the financing of terrorism.

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Replacement of the ruble. The Central Bank believes that cryptocurrencies can replace the ruble as the primary means of payment. This will become possible in the case of the mass acquisition of digital assets by Russians. First Deputy Chairman of the Central Bank of the Russian Federation Ksenia Yudaeva stated that the use of cryptocurrencies as a means of payment will lead to the expansion of the shadow economy and reduce tax revenues. The regulator does not support the admission of private digital currencies to the Russian financial market and their use as a means of payment, as it can lead to “the formation of a number of significant risks to the welfare of citizens, the stability of the financial system and the country’s economic security.”

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“Dangerous” investments in cryptocurrencies. Deputy Chairman of the Central Bank Yudaeva also stated that citizens’ investments in cryptocurrencies can lead to reduced opportunities to finance the real sector, especially sanctioned companies, and decrease the growth potential of the economy. According to the Central Bank, the withdrawal of funds from the economy can lead to problems in the labor market and lower incomes of the Russian Federation’s citizens.

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In March 2022, the Central Bank of the Russian Federation instructed financial institutions to strengthen supervision of transactions involving digital assets. According to the decree, transactions with cryptocurrencies should not violate Russia’s retaliatory sanctions against countries that have imposed economic restrictions on Russians. The document also provides for a ban on the use of cryptocurrencies for the withdrawal of assets abroad.