Bank of Russia Takes a Stand Against Crypto Investment, Only for Foreign Trade

The Russian government does not intend to make Bitcoin available for the regular Russian public, but rather only for foreign trade entities.

Governor Elvira Nabiullina stated that the Russian central bank is open to exploring the possibility of using cryptocurrency within the country, but only with the restriction of it being part of a legal experiment.

At a Bank of Russia press conference on Dec. 16, Nabiullina said: “It’s possible to consider transactions through an authorized organization in the country as part of an experimental legal regime, but that would require a relevant law.” 

In her remarks, Nabiullina highlighted the Bank of Russia's primary qualm with cryptocurrencies - that they cannot be used as a payment method. She further elaborated on the bank's worries surrounding investor security due to the activity of the highly unstable crypto market.

Alexey Zabotkin, deputy governor of the Bank of Russia, stated that even though Russia doesn't officially prohibit its people from investing in cryptocurrency, they worry that its widespread use as a payment tool would be an unavoidable consequence of mass adoption. He stated:

“If you allow free circulation of cryptocurrency as an investment tool within the country, then inevitably, with the expansion of its ownership, it will become more widely used as a means of payment. It will be impossible to prevent this.”

If adopted, Russia's experimental regime could be used to promote the use of cryptocurrencies ''only to support foreign trade'', according to Zabotkin.

In 2020, Russia implemented the "On Digital Financial Assets" law, prohibiting the use of cryptocurrencies such as Bitcoin as a payment method, but still allowing citizens to invest in crypto. Despite this, local crypto exchanges are still not under official regulation.

Despite not permitting its citizens to use decentralized finance tools such as Bitcoin, the Russian government is still eager to capitalize on the global benefits of decentralization. At the end of November, President Vladimir Putin voiced disapproval towards the monopolization of international finance transfer systems and proposed an independent, blockchain-based network for settlements.