President of the Central Bank of Russia Says She doesn’t Want to Legalize Cryptocurrencies
Since some years ago, the Central Bank of Russia has taken a strong position to avoid unnecessary financial risks. It considers Bitcoin and other cryptocurrencies as a “high risk” asset
Although there are many companies and institutions that have decided to bet and invest in the world of cryptocurrencies, there is still a large number of people and institutions that see as negative that this technology is implemented in the financial system of different countries. Some of them consider that, by involving cryptocurrencies with the conventional trading system, the flow of these digital assets can be altered considerably and, in turn, the traditional system could be subjugated to dizzying drops together with the prices of these assets.
Among the people who consider this negative possibility is Elvira Nabiullina, who is the highest representative of the Central Bank of Russia. A few days ago, Nabiullina said she disagreed with the legalization of the use of Bitcoin (BTC), which is, in her opinion, an unreliable asset with a volatile rate that generates little confidence to implement it with free rein in the Russian financial market.
In addition, the president of the financial entity sentenced that she does not consider that any other cryptocurrency will be legalized, due to the multiple risks they represent. Nabiullina also considers that no institution it should take into account to make payments with cryptocurrencies. She ensures that it would be a mistake to apply this technology as a payment method. “We are against the legalization of cryptocurrencies, specifically as a means of payment”, she commented.
During the exposition of the Russian Highest Financial Institution’s point of view, the main representative again declared about the non-legalization of cryptocurrencies. Nabiullina pronounced her speech in the State Duma (the lower chamber of the Russian Federation), during a meeting. “We believe that there are great risks here for those who have a cryptocurrency… It is necessary to protect citizens from risky investments”.
In recent years, the Central Bank of Russia has taken protective measures and is evaluating what it considers as risky investments. It is for this reason that they have remained so hermetic to the possibility of legalizing cryptoactives, especially when they are considered too volatile assets for medium and long term use.
Despite these actions that seek to support the economic stability of Russia, the position against these assets is reinforced more and more. Representatives also commented: “Of course, we are against to enter cryptocurrency in our monetary system (…) For all purposes, we do not see the option of cryptocurrencies to fulfill the function of money substitutes, neither in this case”.
These statements are even adverse when, currently, the Russian official currency, the Ruble, has been in depreciation during some years and it is devalued up to 200%, compared to the price of the US dollar since 2014. This shows that, even avoiding “unnecessary risks”, the financial institution has not been able to evade other risks.
A few years ago, it was announced that the Central Bank of Russia was evaluating the possibility of creating its own cryptocurrency, a project that ended up being ruled out.According to Nabiullina, the idea was ended just when the “madness” of cryptocurrencies came to an end because the bear market was growing by then.
Interestingly, these statements are given just when the bear market has concluded in the cryptocurrency market and when there are many companies and institutions in the world that feel optimistic about the future of this technology, such as the exchange company Kraken, which paid 250 salaries using bitcoins. There are different opinions regarding to cryptocurrencies and these points of view could change at any time.
By María Rodríguez