According to the Bank of Russia, Russian citizens are among the world’s most active participants in the cryptocurrency market.
Going by the estimates from major local banks in July 2021, the Bank of Russia declared that the total annual volume of crypto transactions from the Russian population ran into 350 billion rubles (approximately $5 billion).
It remains unclear if the Bank of Russia considered the price of Bitcoin (BTC) when making these estimations, as the price of BTC has almost doubled since July, surging from around $30,000 to over $60,000 in November.
The Bank of Russia stated in the report that the Russian Federation is also among the top nations when it comes to visiting Binance. Meanwhile, data collated by digital intelligence provider SimilarWeb suggests that Russia came second in terms of total traffic on Binance after Turkey.
Russia remains one of the world’s largest Bitcoin mining hubs, ranking third in terms of national hash rates, according to Cambridge Bitcoin Electricity Consumption Index as of August 2021.
Regardless of Russia’s dominant position in the global cryptocurrency market, the Russian premiere bank insists that the crypto industry still holds immense risks, especially those associated with financial stability, investor protection, money laundering, and criminal financing, as well as ESG risks.
The central bank did not offer any immediate solutions to the aforementioned risks. However, it said that it would keep a close eye on the market to identify potential threats.
The relationship between digital currencies and the financial sector remains limited at the moment. However, the rapid growth and the widespread adoption of digital currencies would pose higher risks both globally and for the Russian financial market.
The Bank of Russia has not given cryptocurrencies an easy ride. Elvira Nabiullina, the CBR governor, argued that responsible governments should not drive crypto adoption. The bank is known for discouraging local banks from dealing with crypto while promoting the use of its own digital currency. Due to this, no Russian crypto exchange has been able to offer crypto services legally.