According to a recent report by a Russian lawmaker, the country’s citizens have invested over 5 trillion rubles ($67.5 billion) in the crypto market, but the regulatory terrain remains hostile and unclear with the governor of the Central Bank of Russia increasingly hinting at a highly regulated environment

Cryptocurrencies have had legal status in Russia since 2020, although it is forbidden to use them as means of payment in the country. Authorities, however, have expressed opposing views stating that they could be a tool of money laundering and possibly used finance terrorism. The law “On Digital Financial Assets” entered into effect this year and regulated a few activities.

Despite recent warnings on a possible ban, the Russian crypto market has seen remarkable growth. The head of the Financial Market Committee Anatoly Aksakov stated during hearings at the lower house of the Russian parliament that residents have invested over $67.5 billion in crypto, although he didn’t specify a timeframe, the state-owned agency Tass reported.

According to some reports, 5 trillion rubles have already been invested by Russians in cryptocurrency

This crypto Russian boom might see big obstacles in the near future.

Aksakov empathized several kinds of investors, including the common Russian, are now interested in the crypto market. He stated:  “It is necessary to determine how we treat this phenomenon and, accordingly, prescribe liabilities in the law, should we prohibit or restrict something.”

Authorities have warned and taken a few measures against what they see as high-risk investments for residents with low financial literacy attracted to the crypto market.

However, there is not enough regulatory clarity for Russian crypto investors at the moment and authorities have sent mixed signals about future legal actions.

The deputy chairman of the Central Bank of Russia (CBR) Vladimir Chistyukhin announced recently that they are preparing an advisory report in which the regulators will start to provide more clarity by explaining the bank’s stance on how cryptocurrencies shall play a role in Russia’s financial market.

I think that we will soon publish a report on cryptocurrencies. This report will contain our approaches related to what place we see for cryptocurrency in the Russian financial market. I give a hint – we do not see a place for cryptocurrency in the Russian financial market.

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Elvira Nabiullina, the governor of the Central Bank of Russia (CBR), shows a conservative and skeptical view when facing the rise of cryptocurrencies. She has hinted at a ban and recently noted that the CBR is capable of implementing restrictions. The local news portal finmarket.ru quoted:

Cryptocurrencies carry great risks for retail investors due to high volatility and use in illegal activities, so we cannot welcome investments in such assets.

Related Reading | To Ban Or Not To Ban? Russia Concerned About Growing Crypto Transanctions

The head of the bank has stated that the regulator doesn’t see the possibility of legalizing cryptocurrencies on the country’s exchanges, but they are studying its other uses.

Earlier, Russia’s Economic Development Minister Maxim Oreshkin had compared bitcoin investments with gambling and warned that cryptocurrencies imply many risks for its investors.

As for bitcoin: if you look at how the value of this asset fluctuates, it’s dozens of percent points up, dozens down. A normal asset that can bring money to eligible investors should not have such characteristics, since it’s worse than a casino,

On Russia’s Finance Ministry views, the country should only allow “eligible investors” to do bitcoin transactions on exchanges.

The Deputy Chairman of the Central Bank Vladimir Chistyukhin has expressed that a solution to their fears would be to prohibit transferring funds from bank accounts to crypto-exchanges:

I think that we will resolve the issue through amending the legislation. There will be a more precise definition of how cryptocurrencies can circulate,

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