Governor of Russia’s c-bank strikes skeptical note on Bitcoin

Maria Nikolova

Elvira Nabiullina says the central bank does not see huge benefits from introducing digital assets in the Russian economy.

Following several months of hectic discussions on the possible legalization of crypto currencies in Russia, the head of the Central Bank of Russia has voiced a more skeptical stance on Bitcoin.

In an interview with CNBC, Elvira Nabiullina, Governor of the Bank of Russia, said the “Megaregulator” considers Bitcoin more of a digital asset than a virtual currency.

She said there was no time frame on any potential authorization of Bitcoin and that the bank sees many risks of using this “asset”. Ms Nabiullina added that the regulator has its doubts about Bitcoin and that it does not see huge benefits from introducing digital assets in the Russian economy.

Last week, Olga Skorobogatova, Deputy Governor at the central bank, said the regulator was considering to tax bitcoin as a digital asset and that the bank will present the relevant legislative documents for in a month. She noted that the topic had been discussed with a number of ministries and institutions and that proposal had been supported by all of them.

In April 2017, Russia’s Deputy Finance Minister Alexey Moiseev said Russia was likely to recognize crypto-currencies as legal in 2018. Shortly after that, however, Maxim Grigoriev, Chief of the Centre for Financial Technologies at the Bank of Russia, noted that it was too early to talk of any legalization of crypto-currencies in Russia.

In the meantime, concerns grow of the increasing number of fraudulent schemes involving bitcoin and other crypto-currencies. Marat Safiulin, head of the Federal Public-State Foundation for the Protection of Investor and Shareholder Rights, expects that the number of such investment scams will rise further and that oversight of use of crypto-currencies has to be tightened.

The attitude towards blockchain has been way warmer. Russia’s prime minister Dmitry Medvedev is one the supporters of distributed ledger technologies. He has instructed the Ministry of Telecom and Mass Communications and the Ministry of Economic Development to study the potential applications of blockchain technology in a number of economic areas.

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