Elvira Nabiullina, president of Russia’s Central Bank, said she did not want to call cryptocurrencies by their names, but rather prefers the nickname “Cryptos-Things” at the recent annual international economic forum in St. Petersburg last month. In this sense, the report released on May 30 supports his statement that the volume of transactions is so small that it does not pose a threat to overall financial stability.
According to the study, when the transactions of active cryptos are put into perspective with the total volume of financial transactions, they are only a drop of water.
In a nutshell, the total volume of cryptos exchanged in 24H reported by CoinMarketCap is less than 15 billion dollars. FOREX, on its own, accounts for a daily volume of $ 5 trillion according to the BIS (Bank for International Settlements).
On the other hand, if the growth of these cryptos were to continue, this would have large repercussions on private and institutional investors, but also on banks and other financial players.
The Central Bank argues that the very high price volatility of these assets is one of their biggest weaknesses as it prevents them from acquiring a stable and reliable standard value.
The report nevertheless highlights the many risks associated with investing in this type of asset; for example, lack of investor rights protection, money laundering and terrorist financing risks, lack of market liquidity, operational risks, but also leverage effects.
Earlier this month, the Russian Duma announced that it was bent on first and new legislation aimed at regulating the cryptocurrency industry. Current laws specify that cryptocurrencies and tokens are considered as properties.
Going even further, the Russian bank Sberbank CIB (Russian bank owned by the Russian Federation, recognized as one of the ten safest banks in Central and Eastern Europe)
and a non-bank financial institution (NSD) announced a pilot project to test ICO technology on the central bank’s regulatory platform.
Sberbank CIB’s CEO, Igor Bulantsev, said the bank viewed the ICOs as “very promising,” noting that many of the bank’s customers “were interested in this new way of raising capital.”