Central Bank Of Russia Estimates Volume Of Crypto Transactions In The Country To Reach IDR 71 Trillion

Russia is one of the countries that use the most cryptocurrency transactions. (photo: doc. pixabay)

JAKARTA – The Russian public is one of the most active participants in the cryptocurrency market in the world, according to the country's central bank.

The Bank of Russia published a new review of financial stability on Thursday, November 25 showing the role of emerging economies in the $2.8 trillion (Rp 40 quadrillion) market.

Citing estimates reported by major local banks in July 2021, the Bank of Russia states that the total annual volume of crypto transactions of the Russian population amounts to 350 billion rubles, or 5 billion US dollars (Rp71 trillion).

It is unclear whether the Bank of Russia has changed this estimate as the price of Bitcoin (BTC) has almost doubled since July, surging from around US$30,000 to over US$60,000 in November.

In the report, the Bank of Russia also notes that the Russian Federation is one of the global leaders in terms of visits to cryptocurrency exchange Binance. According to data from digital intelligence provider SimilarWeb, Cointelegraph reports Russia is the second largest country in terms of total traffic on Binance after Turkey.

The Russian central bank also noted that Russia is one of the largest Bitcoin mining countries in the world, even ranking third in terms of national hash rate, according to the Cambridge Bitcoin Electricity Consumption Index in August 2021.

While acknowledging Russia's leading position in the global cryptocurrency market, the Bank of Russia still outlines the main risks associated with the industry, including those related to financial stability, investor protection, money laundering and criminal financing as well as ESG risks.

The central bank did not suggest immediate action to address these risks but said it would monitor markets closely to identify potential threats:

“The relationship between digital currencies and the financial sector is still limited at this time. However, the rapid growth and widespread adoption of digital currencies will pose higher risks both globally and for Russian financial markets,” said a source at the Central Bank of Russia as quoted by Cointelegraph.

The Bank of Russia has taken a tough stance on cryptocurrencies, as governor Elvira Nabiullina argued that responsible governments should not encourage crypto adoption. The central bank is known for not allowing local banks to deal with crypto and promoting the use of its own digital currency.

This has led to a situation where currently no Russian crypto exchange can legally offer its services.