Governor of the Russian Central Bank: cryptocurrency risks and volatility, it is not appropriate to legalize it

According to a report by Bitcoinist on May 31, Russian central bank governor Elvira Nabiullina said recently that due to the risks and volatility of Bitcoin and other cryptocurrencies, she did not want them to become a payment method and legalize it.

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Bitcoin has "great risk"

Elvira Nabiullina said in a speech to the Russian parliament Duma on the influence of the Russian central bank in 2018 that she will continue to be more pessimistic about cryptocurrencies. The law magazine Pravo quoted her on May 30 as saying:

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"We oppose the legalization of cryptocurrencies, especially as a means of payment. We believe that there is a huge risk for those who hold cryptocurrencies. Therefore, we need to protect citizens from risky investments."

Bitcoin and many of the major competitors have experienced price reversals since the beginning of April, and bitcoin-dollar prices have risen more than 125% in the new round of bull markets. Nabiullina said that although the ruble has depreciated by as much as 200% against the US dollar since 2014, such fluctuations are not good for Russian banks.

As Bitcoinist has previously reported, the Bank of Russia has recently shown an “avoidance of risk” attitude on cryptocurrencies, and officials have not responded to rumors that Russia will create a stable gold-backed currency.

In October last year, Nabiullina claimed that the cryptocurrency "hot" is coming to an end as the bear market continues. Last week, she continued a similar position and reiterated Moscow’s long-standing view of the potential role of the so-called alternative currency “money surrogates” in the Russian economy. She said:

“In principle, we certainly object to the entry of cryptocurrencies into our monetary system. In fact, we have not seen the function of cryptocurrencies to replace currencies, especially in the current (bear market) situation.”

Development status of the Russian encryption industry

In terms of future interaction with the encryption industry, Russia's largest state-owned bank also poured a cold water. At a press conference on Thursday, Andrey Shemetov, deputy governor of the Russian Federal Savings Bank (Sberbank), accused the Russian central bank of its tough stance that caused it to freeze its plans. He said at a press conference:

“We have been waiting for a legal framework that allows us to conduct cryptocurrency transactions. Due to the current negative view of regulators, we have decided to suspend cryptocurrency related programs.”

Therefore, Russia and the encryption industry still maintain a strange relationship.

On the other hand, a court in Omsk, the Siberian city, seemed to have taken the lead this week, becoming the first court in the world to recognize the validity of signing trade agreements using blockchains and smart contracts. The party to the deal is the Russian oil company Petroleum Trading, and its director, Maksim Dyachenko, commented:

“It is clear that the current legal framework is sufficient to allow for industrial-scale innovation, and laws on cryptocurrencies and blockchains are being developed.”

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