Russia seeks to tackle sentimental crypto purchases by reducing deposits to exchanges
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Russia seeks to tackle sentimental crypto purchases by reducing deposits to exchanges

Saudu Clement
Saudu Clement

The Central Bank of Russia (CBR) is reportedly working with commercial banks in the country to delay payments made to crypto exchanges.

A CBR official explained during an event in Sochi that the objective of slowing down crypto exchange payments is to limit the so-called “emotional” purchases made by “unqualified” investors.

According to CBR’s Deputy Chairman Sergei Shvetsov, the move will likely affect peer-to-peer and over-the-counter trading platforms.

We are starting to work with the banking system so that it slows down payments in favor of exchange offices and cryptocurrency exchanges, fencing off opportunities for emotional purchases of this kind of products.

The decision from the central bank comes amid rising investor interest in Bitcoin (BTC) and other cryptocurrencies. CBR remains skeptical about investing in digital assets even as cryptocurrencies are going mainstream.

Just last week, Shvetsov said that investing in crypto is risky and is comparable to pyramid schemes.

When it comes to buying [cryptocurrency] for investment purposes, we are skeptical about this idea. We believe it’s different from traditional assets, it’s highly risky and has signs of a pyramid scheme.

Earlier in June, CBR head Elvira Nabiullina also warned against investing in crypto assets, noting that they offer the most dangerous investment strategy.

The price is very volatile; losses may be appalling. The Central Bank never gives advice, where to invest, but in this particular case – here [one] should definitely not [invest].

This is not the first time that authorities in Russia have opposed crypto investments. The CBR announced new regulations that called on stock exchanges not to offer crypto-related products to investors earlier in July.

According to the CBR, crypto assets are risky because of their highly volatile nature, pricing issues, lack of transparency, limited liquidity, and unclear regulations.

In August, Russian President Vladimir Putin ordered the Bank of Russia, the Ministry of Finance, and the Ministry of Labor to prepare their proposals by Nov. 15 for a procedure that would verify ownership of digital assets.

The country’s financial monitoring agency, Rosfinmonitoring, has also commissioned the creation of a new system to track and analyze the behavior of crypto investors, as well as identifies those who invest in crypto assets.