Russia’s central bank is trying to evaluate the amount of Bitcoin (BTC) held by local investors amid a huge amount of money not flowing back to banks after the withdrawals sparked by the pandemic.
According to Elizaveta Danilova, head of the central bank’s financial stability department, the Bank of Russia is interviewing local cryptocurrency investors to estimate the volume of investments in cryptocurrencies in Russia.
“We need to work on both data and raise public awareness of the risks of such investments that are not covered by anything,” Danilova said in a Reuters interview published on the Bank of Russia’s official website on Thursday.
The official argued that the cryptocurrency market lacks transparency not only in Russia but also in other jurisdictions, pointing to higher risks from crypto derivative products such as bitcoin futures or exchange-traded funds. “The challenge is that the market is cross-border. People can invest in crypto through foreign intermediaries. Some major foreign exchange exchanges trade cryptocurrency derivatives, which involve enormous risks, ”said Danilova.
The Bank of Russia’s efforts to analyze local crypto investment volumes come amid the Russians who have recently been unwilling to put their money in banks. Danilova said up to 2.6 trillion rubles ($ 36 million) were not returned to banks after massive withdrawals in 2020 due to the COVID-19 pandemic.
Some existing data shows that investing in cryptocurrencies has become extremely popular in Russia. According to a survey by the Russian Forex Traders Association, 77% of Russian investors prefer Bitcoin to traditional investment vehicles like gold and forex.
Related: Russia doesn’t plan to follow in China’s footsteps by banning crypto entirely, the deputy finance minister says
Amid the rising popularity of crypto, the Bank of Russia has urged the government to limit crypto investments by unaccredited investors and reportedly launched a legal initiative to slow down transactions on crypto exchanges in order to encourage “emotional” purchases of crypto avoid.
Although the Bank of Russia maintains a skeptical stance on crypto, Russian President Vladimir Putin believes that cryptocurrencies like Bitcoin are good for transferring money around the world and could one day become a “means of accumulation.”