Russian Central Bank: Crypto Still Poses Major Economic Threat

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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September 17, 2024

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Russia’s recent crypto pivot could yet face a roadblock in the form of the Central Bank, which says stablecoins and other tokens could “threaten the stability of the domestic market.”

In a Russian Central Bank report on the “main directions” for economic development 2025-2027, officials explained that using “cryptocurrencies instead of national currencies” poses “risks for Russia.”

Russian Central Bank: Crypto Concerns

“In the absence of global [crypto] regulations, we may see an increase in the use of monetary surrogates in settlements instead of national currencies may increase.”

Russian Central Bank

The bank also warned that talk of global governments making concerted, international efforts to police crypto has cooled. The report’s authors wrote:

“Measures taken by individual countries [to regulate crypto] may be insufficient to limit these risks within national economies. This is due to the cross-border and extraterritorial nature of [cryptoassets and stablecoins].”

And the bank warned that many global governments now prefer to keep their IT policies under close wraps.

It said that the era of “broad cooperation between countries” was now “ending.”

This era is being replaced by “a period in which states focus on issues of rivalry,” the bank explained.

In this era, countries would focus on “limiting competitors’ access to their economies and technologies,” the authors added.

No Fresh Crypto Ban Concerns?

The bank concluded that crypto remains a risky “external macroeconomic factor” for Russia and elsewhere in the world.

However, the bank stopped short of renewing its previous calls for a blanket ban on crypto, which at this stage now seems impossible in Russia.

Crypto adoption has increased apace in Russia since the outbreak of war in Ukraine. While the bank initially fought back with calls for a China-style crackdown, Western sanctions have forced it to radically reconsider.

A top lawmaker recently admitted that Russian firms have already conducted “billions of dollars” worth of crypto-powered cross-border settlements.

Russian Crypto Pivot Already Looking Irreversible?

The bank is also working with the Ministry of Finance on a sandbox that will allow firms to trade with international partners in crypto in a regulated environment.

And the bank has had to reluctantly give its blessing to the legalization of crypto mining.

Investors now appear to be flooding to back the mining sector. At least half a dozen, confirmed large-scale, cutting-edge Bitcoin (BTC) mining data centers are now in construction in various parts of the country.

Major business players, some of which are partially state-owned, have expressed their willingness to enter the crypto sector.

These include the likes of Sberbank, the banking and IT giant, as well as the oil behemoth Gazprom.

The latter is reportedly set to open a 500-rig crypto mining center in the historic city of Novgorod.

Lawmakers have also spoken of the need to keep certain aspects of Russian crypto policy under wraps.

They think that doing so will prevent the West from attempting to undermine new Russian state-backed crypto projects.