Russia is quickly becoming the world’s largest market for cryptocurrencies and blockchain technology, with as much as $5 billion in investments made every year. The country has banned ICOs and imposed strict regulations on companies looking to become a part of the space, but it has also been very supportive of new ideas.
Russia has a strong presence in the cryptocurrency market, and it is expected that this will continue to grow. The Bank of Russia expects future of cryptocurrency 2021.
According to the Russian central bank, Russians are among the world’s most active players in the cryptocurrency market.
On Nov. 25, the Bank of Russia released a new report on financial stability, highlighting the country’s expanding involvement in the $2.8 trillion market.
The Bank of Russia estimated that the overall yearly volume of crypto transactions by the Russian population is 350 billion rubles, or $5 billion USD, based on estimates released by major local banks in July 2021.
The price of Bitcoin (BTC) has than doubled since July, soaring from roughly $30,000 to over $60,000 in November, making it unclear if the Bank of Russia has converted these estimates.
The Bank of Russia also said in the study that the Russian Federation ranks first in the world in terms of visitors to the Binance cryptocurrency exchange. Russia, after Turkey, is the second largest nation in terms of overall traffic on Binance, according to statistics from digital intelligence firm SimilarWeb.
According to the Cambridge Bitcoin Electricity Consumption Index as of August 2021, Russia is one of the world’s major Bitcoin mining nations, ranking as the third-largest country in terms of hash rate.
Despite acknowledging Russia’s dominance in the global cryptocurrency market, the Bank of Russia still identified major risks associated with the industry, including those related to financial stability, investor protection, money laundering, criminal financing, and environmental, social, and governance (ESG) risks.
The central bank did not propose any immediate actions to address these concerns, but it did say it will keep a careful eye on the market for any threats:
“At the present, the interaction between digital currencies and the financial industry is limited. The fast expansion and broad use of digital currencies, on the other hand, would increase global and Russian financial market vulnerabilities.”
Related: Despite poor regulation, the Russian crypto sector is worth $500 billion, according to an executive
The Bank of Russia has taken a hard line on cryptocurrencies, with governor Elvira Nabiullina claiming that responsible governments should not be driving cryptocurrency adoption. The central bank is well-known for refusing to let local banks deal with cryptocurrency and instead encouraging the usage of its own digital currency. As a result, there is currently no legal way for any Russian crypto exchange to operate.
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