Russians reportedly own over $130 billion in crypto, although the government is yet to adopt legislation on crypto use.
The Russian prime minister stated that Russians’ cryptocurrency holdings are worth billions of dollars, but the government has yet to develop a regulatory framework for the industry.
Russians collectively own more than 10 trillion rubles ($130 billion) in digital assets such as Bitcoin (BTC), according to Russian Prime Minister Mikhail Mishustin, who asserted at the Russian government’s annual report presentation on Thursday.
The prime minister did not specify the source of this figure, just remarking that it is based on “different assessments,” adding:
“We are well aware that we have more than 10 million young people having opened crypto wallets so far on which they have transferred significant amounts of money, which exceeds 10 trillion rubles.”
If true, Mishustin’s current estimates of Russian crypto holdings are very near to Russia’s gold stockpile, which reportedly totaled $140 billion as of late March 2022. According to White House estimates, Russia’s gold reserves account for roughly 20% of the country’s total reserves.
The latest Russian government figures come months after the Bank of Russia announced plans to analyze the magnitude of local crypto holdings last year. Since then, the central bank has only calculated that Russia’s yearly crypto transactions are valued at roughly $5 billion. Earlier this year, some sources projected Russia’s total cryptocurrency holdings to be $214 billion.
Even though Russians are rapidly investing in cryptocurrencies, the Russian government has been hesitant to adopt clear laws to oversee the booming cryptocurrency sector, with multiple government entities failing to find an agreement on how to manage the business. The Russian finance ministry filed a revised version of the Russian crypto law with the government on Friday, after changing the text in response to comments from other ministries and authorities.
As previously reported, the Russian central bank has been one of the most vocal local opponents of cryptocurrency, with Bank of Russia governor Elvira Nabiullina encouraging the state to ban Bitcoin earlier this year.
As Russia has become the world’s most sanctioned country, several global leaders have raised alarm about the increasing narrative of Russia’s ability to exploit cryptocurrency to circumvent sanctions. The European Union Council approved the fifth package of sanctions on Russia on Friday, including a bar on providing “high-value crypto-asset services to Russia.” “This will help to close any loopholes,” the council stated in a statement.
Ksenia Yudaeva, the Bank of Russia’s first deputy governor, allegedly claimed earlier this week that sanction evasion with cryptocurrency in Russia is “practically impossible,”, particularly for major transactions. Previously, the central bank reportedly stated that cryptocurrencies such as Bitcoin are “essentially a financial pyramid scam.”
Some major executives in the bitcoin business are certain that cryptocurrency will not be used by Russians to circumvent sanctions. Changpeng Zhao, the founder, and CEO of Binance, the world’s largest cryptocurrency exchange by trading volume, stated on Wednesday that Russians cannot use cryptocurrencies to avoid sanctions. This is because crypto transactions are not anonymous, he explained:
“Most transactions do need to go through a centralized exchange, any large transactions of value because the decentralized exchanges don’t have enough liquidity yet. […] So that’s a misconception that Bitcoin is anonymous. Bitcoin’s anonymous feature is very, very weak.”
