Market News | The Central Bank published a report on cryptocurrency for public discussions

✓ In the last year, the world has seen rapid growth in the cryptocurrency market. Cumulative volumeTheir capitalization in December 2021 reached $2.3 trillion, which corresponds to approximately 1% of global financial assets.

✓ Volume of transactions between Russian citizens andcryptocurrencies, according to some estimates, reaches $5 billion per year. Russian citizens are active users of Internet platforms that trade cryptocurrencies. In addition, Russia is among the leaders in terms of global mining capacity

✓ The long-term potential of using cryptocurrencies for settlements appears limited.

✓ The spread of cryptocurrencies createssignificant threats to the welfare of Russian citizens, the stability of the financial system and threats associated with servicing illegal activities with cryptocurrencies

✓ Global approach to cryptocurrency regulationhas not yet been fully formed, in many countries the activity of cryptocurrency circulation is in the “gray” zone, but in general one can note a trend towards tightening regulation

✓ Potential risks to financial stability,associated with cryptocurrencies are significantly higher for countries with emerging markets, incl. for Russia, in particular, due to a traditionally higher propensity for currency exchange and an insufficient level of financial literacy.

✓ A more stringent approach is implemented in relation to fiat cryptocurrencies than to stablecoins.

✓ In order to reduce the threats caused by the spread of cryptocurrencies, the Bank of Russia proposes to make changes to legislation

✓ Mining for some types of cryptocurrenciesinvolves, among other things, issuing cryptocurrency and/or receiving cryptocurrency as a reward for validating transactions. It cannot be ignored when considering the subject of the report, since this activity increases the involvement of the population and the economy as a whole in the cryptocurrency market. The Bank of Russia believes that the current scale and further spread of cryptocurrency mining in Russia poses significant risks for the economy and financial stability

✓ The Bank of Russia plans to improve the system of regular monitoring of transactions with cryptocurrencies

✓ In recent years, the Bank of Russia and central banks of many countries have been actively introducing fast payment systems that meet the needs of citizens and businesses for instant payments.

✓ The possibilities of cryptocurrencies as an investment instrument can be further realized through the use of digital financial assets

Consultation_Paper_20012022.pdf (cbr.ru)