The Central Bank has estimated the annual volume of transactions with cryptocurrencies in Russia at $ 5 billion (350 billion rubles), indicated in the review of financial stability for the third and fourth quarters of 2021, published by the Bank of Russia. Such data were provided to the Central Bank by large credit institutions in July.
The amount is comparable to the investments of Russians in the shares of foreign companies. According to the Bank of Russia, in 2020, residents of Russia invested 474 billion rubles in foreign securities. However, the Central Bank notes that it is incorrect to interpret the estimated volume of transactions with digital assets as a flow of citizens' savings into cryptocurrencies. “Firstly, data on trading turnover may reflect alternate purchases and sales, and secondly, part of this volume is sales of digital currency obtained as a result of mining,” the document says.
The Bank of Russia said that Russians are among the most active participants in the crypto market. For example, Russia is among the leaders in terms of the number of visits to the Binance exchange. The Central Bank expressed concern about this trend, since such a large volume of investments in cryptocurrency carries financial risks both for the citizens themselves and for the country.
The document notes that digital currencies are often used in criminal activities. In addition, inexperienced cryptocurrency holders often suffer losses due to price fluctuations, fraud and hacker attacks. The Bank of Russia also drew attention to the large amount of energy consumed in the production of digital coins and the harm of mining to the environment.
In October, Russia took the third place in the world in terms of the volume of cryptocurrency mining. The country's share in global production from September 2019 to August 2021 almost doubled – from 5.9 percent to 11.2 percent. The total computing power in the country amounted to 13.6 Eh/s. The number of miners in the country has skyrocketed after the ban on digital assets in China, which led to massive migration.