Business 1 December 2017Ed Drake
Russian central bank issues fresh warning over cryptocurrency investments
The Russian central bank has issued new warnings over cryptocurrency investments, urging investors to be mindful of the risks, according to a report published this week.
According to reports in Russian media, the Central Bank of Russia’s Financial Stability Report flagged the current conditions in cryptocurrency markets as a “bubble,” and warned investors risked heavy losses from their exposure to digital assets.
The bank also expressed concerns about illegal uses of cryptocurrencies, such as funding international terrorism and money laundering—a common thread running through much of the central bank’s criticisms of cryptocurrency markets in recent months.
The report concluded that it was for regulators, both locally and globally, to reduce the risk profile attached to investments in cryptocurrencies.
“The task of national and supranational regulators is to minimize those risks via developing a coordinated approach to regulation of the cryptocurrencies market and restricting the potential of high-risk investments and transactions,” according to the report.
The warnings come as the latest in a series of similar statements from senior figures in Russia, including the federal government, as well as the central bank. Prime Minister Dmitry Medvedev has expressed his own concerns, while President Vladimir Putin has issued legal decrees effectively outlawing certain cryptocurrency activities.
The Central Bank of Russia’s deputy governor, Sergei Shvetsov, said in the last few weeks that steps would be taken to ban international exchanges from selling cryptocurrency assets in Russia, citing the perceived fraud risk.
“We consider all cryptocurrency derivatives to be a negative development on the Russian market and do not consider it possible to support it, and will even assume measures to restrict potential operations with such instruments made by the regulated part of the Russian market,” said Shvetsov.
Earlier in September, the country’s deputy finance minister Alexey Moiseev announced that efforts were underway to ban cryptocurrency payments altogether, a statement which caused concern among Russian cryptocurrency investors at the time.
At the time, he described how “no regulator doubts that payments will be banned,” citing possible legislative measures by the end of this year.
The latest warnings from the Russian central bank confirm the pessimistic approach adopted in Russia in recent months, at a time when governments around the world are striving to get to grips with regulating cryptocurrencies.
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