Elvira Nabiullina, governor of the Russian Central Bank, said that the Russian Central Bank is willing to consider allowing cryptocurrencies to be used within the country, but only as part of a legal experiment.

“It is possible to consider transactions through an institution authorized in the country as part of an experimental legal system, but this requires a relevant law,” Nabiullina stated during a press conference of the Bank of Russia on December 16.

Nabiullina emphasized that the Bank of Russia’s primary objection to cryptocurrencies has always been that they cannot be used as a payment instrument. She added that the central bank is also concerned about protecting investors because the cryptocurrency market is very volatile.

While Russia does not officially ban its citizens from investing in cryptocurrencies, the Bank of Russia believes that mass adoption of cryptocurrencies will inevitably lead to their use as a means of payment, according to Bank of Russia Deputy Governor Alexei Zabotkin. He said:

“If you allow the free circulation of cryptocurrencies as an investment tool within the country, then, as their ownership expands, they will be widely used as a means of payment. It will be impossible to prevent this.
As such, if adopted, the Russian experimental system will be used to benefit the use of cryptocurrencies within Russia, but “only to support foreign trade,” Zabotkin stressed.

The latest news provides some clarity as to why Russia’s central bank has a negative attitude towards the adoption of cryptocurrency as an investment tool in the country.

Russia’s main crypto law, “On Digital Financial Assets,” has officially banned the use of cryptocurrencies such as Bitcoin
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For payment purposes in 2020. The law did not prevent Russians from investing in cryptocurrencies, but local cryptocurrency exchanges remained unregulated.

Related: The Bank of Russia wants to stop miners from selling cryptocurrency to Russians

Although it is not willing to allow Russians to use decentralized finance tools like Bitcoin domestically, the Russian government itself does not want to miss out on the benefits of decentralization on a global scale. In late November, President Vladimir Putin criticized the monopoly of global financial payment systems, calling for the creation of an independent blockchain-based settlement network.

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