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Russia's retail cryptocurrency operations currently stand at about $5 billion per year.
On Friday, credit rating agency Fitch published a research piece about Russia's proposed ban on cryptocurrencies. Although the report agreed with the Central Bank of Russia's (CBR) position that the ban would limit its financial system's exposure to risks, it also cautioned that such a proposal could "hold back the diffusion of technologies that could improve productivity."
In addition, Fitch warned:
"Suppose this slows the spread of crypto-driven innovations that, for example, improve the speed and security of payments or asset liquidity via tokenization. In that case, it could over time weaken this aspect of the Russian banking sector's operational environment relative to peers."
Additionally, Fitch commented on the adoption of a central bank digital currency, or CBDC, in Russia, saying that "[the digital ruble] should increase the authorities' capacity to monitor and manage financial flows, which might otherwise be eroded by the growth of cryptocurrency transactions." The report also clarified that a primary motive for the CBR proposing harsh cryptocurrency restrictions might be to reduce competition against its upcoming CBDC.
Like India, Russia's crypto regulatory environment has been chaotic lately, with policymakers frequently oscillating between an outright ban on digital currencies versus calling for an established regulatory framework. At the same time, even former Russian president Dmitry Medvedev offered his comments on the crypto ban proposal as reported by local news outlet rbc.ru on Friday, and translated by Cointelegraph:
"I'll say it frankly — when they try to ban something, it very often leads to the opposite result of what is intended. But the position of the Central Bank has, of course, its own reasons, which are also known to everyone."
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