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The Bank of Russia is against investing in cryptocurrencies

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Russia’s central bank governor Elvira Nabiullina said the Russian central bank is willing to consider allowing cryptocurrency 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 regime, but this requires relevant law,” Nabiullina advertiser During a press conference of the Bank of Russia on December 16.

Nabiullina emphasized that the Bank of Russia’s only objection has always been that cryptocurrency cannot be used as a payment instrument. She added that the central bank is also concerned about protecting investors because the cryptocurrency market is highly 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 the Russian Central Bank is like this Negative to adopt crypto as an investment tool in the country.

Russia’s main crypto law, “On Digital Financial Assets,” officially banned the use of cryptocurrencies such as Bitcoin (BTC) for payment purposes in 2020. The law did not prevent Russians from investing in cryptocurrencies, but on a local level Cryptocurrency exchanges remained unregulated.

Related: The Bank of Russia wants to prevent miners from selling cryptocurrencies 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, Russian President Vladimir Putin criticized monopolies in global financial payment systems, calling for An independent and blockchain-based settlement network.