The Russian prime minister stated that Russians’ cryptocurrency holdings are worth billions of dollars, but the government has yet to adopt a regulatory framework for the sector.
Russians collectively own more than 10 trillion rubles ($130 billion) worth of cryptocurrencies such as Bitcoin (BTC), Russian Prime Minister Mikhail Mishustin said Thursday at the presentation of the Russian government’s annual report.
The Prime Minister did not mention the source of this figure, noting that the amount is based on “various estimates”, stating:
“We are well aware that more than 10 million young people have so far opened cryptocurrency wallets in which they have transferred significant amounts of money, exceeding 10 trillion rubles.”
If true, the latest estimates of Russian cryptocurrency holdings cited by Mishustin are pretty close to Russia’s gold reserves, reportedly amounting to $140 billion at the end of March 2022. According to White House estimates, Russia’s gold holdings make up about 20% of the country’s central bank’s total reserves.
The latest figures from the Russian government come months after the Bank of Russia announced its plans to assess the size of local cryptocurrency holdings last year. Since then, the central bank has only estimated annual cryptocurrency transactions in Russia to be worth about $5 billion. Earlier this year, some sources also estimated Russia’s total cryptocurrency holdings at $214 billion.
Russian Prime Minister Mishustin says Russians have already put around 10 trillion rubles ($130 billion) into cryptocurrency.
I’m not surprised. Many hastily bought bitcoin when it looked like the ruble was gonna tank. Some foreigners are also using it to get money out of Russia. pic.twitter.com/o9R3VQRtP0— Jonny Tickle (@jonnytickle) April 7, 2022
Despite Russians investing more and more in cryptocurrencies, the Russian government has been slow to adopt clear rules to regulate the growing cryptocurrency market, as the different government structures have not reached a consensus on how to regulate the industry. On Friday, the Russian Ministry of Finance presented another version of the Russian draft law on cryptocurrencies, after modifying the document in accordance with the observations of other ministries and regulators.
As previously reported, the Russian central bank has been one of the biggest local crypto skeptics, with Bank of Russia Governor Elvira Nabiullina urging the state to ban Bitcoin earlier this year.
At a time when Russia is becoming the most sanctioned country in the world, a number of world officials have raised concerns about the growing narrative of Russia’s potential to use cryptocurrencies to evade sanctions. On Friday, the Council of the European Union issued the fifth package of restrictive measures against Russia, approving a ban on providing “high-value crypto asset services to Russia.” “This will contribute to closing potential loopholes,” the council said in the official statement.
Earlier this week, the first deputy governor of the Bank of Russia, Ksenia Yudaeva, reportedly argued that crypto sanctions evasion in Russia is “virtually impossible,” particularly for large transactions. The central bank has previously reiterated that cryptocurrencies like Bitcoin are “actually a financial pyramid scheme.”
Some of the top executives in the cryptocurrency industry are certain that cryptocurrency is of no use to the Russians as a tool to evade sanctions. Changpeng Zhao, founder and CEO of Binance, the world’s largest cryptocurrency exchange by trading volume, stated on Wednesday that Russians can’t really use cryptocurrency to circumvent sanctions. This is because cryptocurrency transactions are not anonymous, he stated:
“Most transactions have to go through a centralized exchange, any large value transaction, because decentralized exchanges don’t have enough liquidity yet. […] So it is a mistake to think that Bitcoin is anonymous. Bitcoin’s anonymous feature is very, very weak.”
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