According to the Russian central bank, Russians are among the world’s most active participants in the cryptocurrency market, although the Bank of Russia is still sceptical about Bitcoin.
On Nov. 25, the Bank of Russia released a new report on financial stability, highlighting the country’s expanding involvement in the $2.8 trillion markets.
The Bank of Russia estimated that the overall yearly volume of crypto transactions by the Russian population is 350 billion rubles, or $5 billion USD, based on estimates released by major local banks in July 2021.
The price of Bitcoin (BTC) has then doubled since July, soaring from roughly $30,000 to over $60,000 in November, making it unclear whether the Bank of Russia has converted these estimates.
The Bank of Russia also stated in the study that the Russian Federation ranks first in the world in terms of visits to the Binance cryptocurrency exchange.
Russia, after Turkey, is the second-largest country in terms of total traffic on Binance, according to data from digital intelligence firm SimilarWeb.
Russia and Bitcoin Mining
According to the Cambridge Bitcoin Electricity Consumption Index as of August 2021, Russia is one of the world’s largest Bitcoin mining countries, ranking as the third-largest nation in terms of hash rate.
Despite acknowledging Russia’s dominance in the global cryptocurrency market, the Bank of Russia still identified major risks associated with the industry, including those related to financial stability, investor protection, money laundering, criminal financing, and environmental, social, and governance (ESG) risks.
The central bank did not propose any immediate measures to address these risks, but it did say it will keep a careful eye on the market for any threats:
“The relationship between digital currencies and the financial sector remains limited at the moment. However, the rapid growth and the widespread adoption of digital currencies would pose higher risks both globally and for the Russian financial market.”
The Bank of Russia has taken a hard line on cryptocurrencies, with governor Elvira Nabiullina claiming that responsible governments should not be driving cryptocurrency adoption.
The central bank is well-known for refusing to let local banks deal with cryptocurrency and instead promoting the usage of its own digital currency. As a result, there is currently no legal way for any Russian crypto exchange to operate.