Russian PM forecasts disappearance of cryptocurrencies

Maria Nikolova

Whereas blockchain has potential, the cryptocurrencies could be the dead-end segment of the cyber world, said Dmitry Medvedev.

Russia’s authorities continue to voice their skepticism with regard to cryptocurrencies. Russia’s Prime Minister Dmitry Medvedev, quoted by information agency Interfax, has forecast the disappearance of the cryptocurrencies, calling them a “dead-end segment of the cyber revolution”. However, he noted that the technology at the basis of the cryptocurrencies is not necessarily doomed.

Dmitry Medvedev is a known advocate of the blockchain technologies. Back in May 2017, he urged the legalization of blockchain. He had earlier instructed the Ministry of Telecom and Mass Communications and the Ministry of Economic Development to explore the possible applications of the blockchain technology in a number of economic areas.

Mr Medvedev’s stance reflects that of the Central Bank of Russia. In its most recent “Review of Financial Stability” published in November 2017, the regulator enlists a number of risks for the financial stability, with the list including the cryptocurrency market.

According to the “Megaregulator”, one of the sources of risks in the future may be the high activity in the cryptocurrency market, including Bitcoin. The use of cryptocurrencies is getting more and more popular, the central bank noted. The phenomenon is particularly evident in the case of Bitcoin, whose price is steeply rising whereas the volatility remains high and the volume of trades involving Bitcoin is increasing.

The formation of a bubble in the cryptocurrency market may lead to significant losses for consumers. In addition, cryptocurrencies may be used for laundering money and financing terrorism, the central bank warned.

The central bank has confirmed that it is collaborating with the Ministry of Finance to develop law amendments that will offer a definition of various digital technologies used in the financial sphere, with the Russian ruble set to remain the single payment means in Russia.

In October last year, Russia’s president Vladimir Putin signed a number of orders to the Central Bank of Russia and the Russian government with regard to fintech and cryptocurrencies.

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