Vladimir Putin says cryptocurrencies are volatile and the “risks are very high”

By: Ali Raza
Ali Raza
Ali plays a key role in the cryptocurrency news team. He loves travelling during his spare time and enjoys… read more.
on Dec 1, 2021
  • The President of the Russian Federation, Vladimir Putin, has stated that cryptocurrencies carry high risks.
  • He further stated that these assets need to be monitored and regulated.
  • This comes after a recent report stating crypto transactions in Russia totalled to $5B annually.

Cryptocurrencies in Russia remain in a sort of “grey zone.” While the country has not declared an outright ban on crypto, like in China, the government remains sceptical but allows crypto trading activities to progress.

The President of the Russian Federation, Vladimir Putin, criticized cryptocurrencies during the “Russian Calling” investment forum held in Moscow.

Vladimir Putin agrees cryptocurrencies carry risks

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According to a local publication, Putin stated,

It is not backed by anything [and] the volatility is colossal, so the risks are very high. We also believe that we need to listen to those who talk about those high risks.

Putin further states that cryptocurrencies need to be monitored and regulated, noting that digital assets recorded a high level of global adoption.

As aforementioned, the Russian crypto regulatory framework lacks clarity. However, the Russian Federation is considering launching a central bank digital currency, but this might not happen soon, given the legislative changes that need to happen for a digital ruble to be developed.

Russians transact $5B crypto annually

While there is a lack of regulatory clarity in cryptocurrency trading, Russia is leading as one of the most active crypto markets globally. The high level of crypto adoption could be attributed to this lack of regulation.

A recent report from the Bank of Russia cited estimations from top local banks suggesting that the total annual volumes on crypto transactions amounted to 350 billion rubles, equivalent to $5 billion.

The Bank of Russia further stated that the Russian Federation was one of the leading countries in terms of site visits to the Binance cryptocurrency exchange. Russia currently ranks as the second-largest traffic generator to Binance after Turkey.

The bank also touched on crypto mining, stating that Russia was one of the largest Bitcoin mining countries globally. Currently, Russia ranks as the third-largest Bitcoin mining hub in terms of hash rates.

Russia is not the only country in the Soviet Union reporting growing levels of crypto adoption and mining. Kazakhstan is currently the world’s second-largest Bitcoin miner by hash rate after the US.

Kazakhstan accounts for 18.1% of the Bitcoin mining hash rate, a major increase from the 8.8% in June. The country’s president recently announced plans to build a nuclear power plant to support mining.

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