In an interview with the Komsomolskaya Pravda newspaper, the head of Russia’s Central Bank, Elvira Nabiullina, expressed that investing in crypto assets is the most dangerous investment strategy.
During the conversation, Nabiullina stated:
“Speculative crypto assets are surely the most dangerous strategies of all. The price is very volatile; losses may be appalling. The Central Bank never gives advice, where to invest, but in this particular case – here [one] should definitely not [invest].”
Instead, the central bank governor considers bank deposits as one of the best conservative saving strategies as she declared:
“Many have rushed to the stock market, yields are higher here, but one should always remember that there are risks as well. It is necessary to closely explore the products, take a critical look at ads, particularly when you are told that there are no risks here, whereas yields are high, it doesn’t work that way.”
Digital currency prototype
Although the Central Bank Chief believes that digital currencies will be the future of financial systems as the economy moves online, this will be in the form of central bank digital currencies (CBDCs), which are not the same as cryptocurrencies like Bitcoin. Authorities will produce and control digital currencies, and one digital rouble will be equal to one cash rouble.
In October 2020, Moscow released a consultation document on a digital rouble, with the goal to have a prototype ready by the end of 2021. Pilots and trials may begin as early as next year, according to Nabiullina, when giving an exclusive interview to CNBC’s Hadley Gamble on 2nd June 2021.
In contrast to Nabiullina, Tinkoff, Russia’s largest online bank, says it wants to provide cryptocurrency trading to its customers but that it would take time due to the country’s central bank’s strong position in the space. Tinkoff’s CEO, Oliver Hughes, told CNBC that “qualified investors who know what they’re doing” want to invest in cryptocurrency.
Moreover, Russian billionaire Oleg Deripaska commented on his Telegram last week he wants the country’s Central Bank to embrace cryptocurrency, citing El Salvador “realized the need for digital currencies and took a simple path – recognizing Bitcoin as a means of payment.”
There appears to be uncertainty around cryptocurrency in Russia, with the Central Bank Chief believing in digital currencies for the future of the country’s financial system and discouraging investors from entering the space.
However, as the digital economy evolves, it will be interesting to observe how events unfold with online banks and billionaires pushing for greater use.
Until last year, cryptocurrency was prohibited in Russia and it still cannot be used to make payments to this date.