Russians investing in digital currencies are depriving the economy of funding, the Bank of Russia said in a comment to Forbes.
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According to them, the previously proposed initiative for a full ban on cryptocurrency operations is aimed at preventing capital flight.
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“Instead of putting funds into deposits, stocks and bonds that finance our economy, citizens are purchasing cryptocurrencies that actively support payments in the illicit economy. One could draw a parallel with dollarisation, but only investments in cryptocurrencies can completely lose value,” the Bank of Russia said.
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The regulator acknowledged that Russians’ cryptocurrency activity is currently small, but given the trend toward growth, it sees a need to warn about risks of forming a parallel banking system.
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“We can also draw a parallel with the situation of currency lending to citizens. Although the share of foreign-currency mortgages did not exceed 2%, this has become a socially significant issue. To prevent a similar development in the cryptocurrency market, we strive to act promptly,” the Bank of Russia said.
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In January, the Bank of Russia published the report, in which it proposed banning the circulation and mining of cryptocurrencies on the territory of the Russian Federation.
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The State Duma said that the central bank’s stance toward cryptocurrencies risks making Russia a laughingstock. The Finance Ministry likewise advocated regulation, rather than a ban on the industry.
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