Russia: “Cryptoassets are not a threat to financial stability”

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President of Russia’s Central Bank doesn’t want to call cryptocurrencies by their names. Elvira Nabiullina prefers the nickname “Cryptos-Things”.  Last month, Elvira Nabiullina was at the recent annual international economic forum in St. Petersburg when she used this new wording. The report released on May 30 supports the statement that the volume of transactions is very small. So small that it does not pose a threat to overall financial stability.

When crypto transactions are put into perspective with the total volume of financial transactions, they are only a drop of water.

Look at it this way: the total 24H volume of cryptos exchanged reported by CoinMarketCap is <15 billion dollars. On the other hand, FOREX accounts for a daily volume of $ 5 trillion according to the BIS (Bank for International Settlements).

The continuing growth of cryptoassets

If the growth of these assets continues, it would have large repercussions on private and institutional investors. Additionally,  banks and other financial players could be impacted. The Central Bank argues that the high volatility of these assets is one of its biggest weaknesses. Indeed, it prevents cryptocurrencies from acquiring a stable and reliable standard value.

Nevertheless, the report highlights many risks associated investing in this new asset type. Some risks include the lack of investor rights’ protection, money laundering and terrorist financing risks, lack of market liquidity, operational risks, but as well leverage effects.

Earlier this month, the Russian Duma announced that a group is working on new set of legislation. These legislations aim at regulating the cryptocurrency industry. Current laws specify that cryptocurrencies and tokens are considered as properties.

Pilot project on the way

The Russian bank Sberbank CIB and a non-bank financial institution (NSD) announced a pilot project to test ICO technology on the central bank’s regulatory platform. Sberbank is a Russian bank state-owned. It is recognized as one of the ten safest banks in Central and Eastern Europe)

Sberbank CIB’s CEO, Igor Bulantsev, said the bank viewed the ICOs as “very promising“. He notes that many of the bank’s customers “were interested in this new way of raising capital.”

BIS, SberbankCoinTelegraph

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