Credit rating agency Fitch published Friday a report on Russia’s proposed ban of cryptocurrencies. The Central Bank of Russia (CBR), although agreeing with the report, stated that the ban would limit the financial system’s exposure. However, Fitch cautioned that such proposals could hinder the spread of technology that could increase productivity.
In addition, Fitch warned:
“Suppose that this slows down the spread of crypto driven innovations that, for instance, improve the speed of payments and asset liquidity via tokenization. This could lead to a decrease in the operational environment of Russian banks relative to their peers.
Fitch also commented on Russia’s adoption of a digital currency central bank, or CBDC. Fitch stated that the “digital ruble” should improve the authorities’ ability to monitor and manage financial flows. This could be affected by the rise of cryptocurrency transactions. It was also revealed that the CBR might have proposed harsh cryptocurrency restrictions to limit competition for its CBDC.
Russia’s crypto regulatory landscape has been chaotic, much like India’s. Policymakers have often opted for a ban on digital currencies or a framework to regulate them. Even Dmitry Medvedev, the former Russian president, offered his thoughts on the proposed crypto ban. This was reported by rbc.ru and translated by Cointelegraph on Friday:
“I will be honest and say that when they ban something it often results in the opposite of what was intended. The Central Bank’s position is not without its reasons. This is also well-known to all.