Russia Warns Against Crypto Savings Amid Decline in Foreign Fiat
In a recent development, a government official in Moscow has cautioned Russians against embracing cryptocurrencies amidst a diminishing interest in foreign fiat currencies within the nation. The official suggests that these high-risk assets are more suitable for affluent investors than the average citizen seeking to safeguard their savings.
Russians Urged to Exercise Caution as Interest in Traditional Currencies Wanes
As restrictions on foreign currency accounts and operations persist due to Western sanctions, the volume of savings held in foreign fiat has witnessed a decline. Given this backdrop, Russians have been urged to exercise caution and refrain from transitioning to cryptocurrencies.
Speaking at the blockchain conference, "Finance of the Future: Challenges and Opportunities," Ivan Chebeskov, the head of the Financial Policy Department at the Russian Ministry of Finance, expressed his reservations. "We would not want citizens' savings to be directed to digital currencies," he stated.
Cryptocurrencies are a high-risk instrument, and even stablecoins pegged to traditional currencies are not very suitable for savings purposes as they lack interest accrual, Chebeskov elaborated.
Instead, Chebeskov advocated for regulated digital financial assets (DFAs), highlighting their potential as a viable alternative. These DFAs typically manifest as tokens issued on a licensed blockchain platform under Russian law, a market projected to expand significantly according to the Bank of Russia.
Crypto is Primarily Suited for Wealthy Individuals
The head of the Financial Policy Department further elaborated that cryptocurrencies and similar assets are primarily suited for wealthier individuals and should be limited to 10 to 15% of the capital available for investment. Conversely, he said that for the majority of Russians with average income and savings, it is not suitable due to the potential risks involved.
Anatoly Popov, deputy chairman of the board of Sberbank, Russia's largest bank, who also spoke at the conference, revealed that around 13 million people in Russia, roughly 9% of the population, currently hold cryptocurrencies. Notably, at least 1 million of these individuals actively engage with crypto assets. Despite the government's warning, it remains to be seen whether this figure will continue to rise.
The big question is: will the number of Russians investing in cryptocurrencies defy the government's cautionary stance? Please post your comments on this story in the comments section below.
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