According to Russian Prime Minister Mikhail Mishustin, his compatriots own a total of more than 10 trillion rubles ($130 billion) in cryptocurrencies. Meanwhile, the country still has to work on crypto regulation.
The crypto coins are winning more and more Russian souls for themselves. The Russian prime minister said Thursday at the presentation of the annual report of the Russian government that his compatriots own more than 10 trillion rubles in cryptos. It is not immediately clear how Mishustin arrived at that figure. He said the amount is based on “different estimates”.
“We are well aware that more than 10 million young people have so far opened a crypto wallet, into which they have transferred significant amounts of money,” Mishustin said.
Worth almost as much as Russian gold stock
If Mishustin’s numbers are correct, his population’s crypto fortune is worth almost as much as Russia’s gold supply, which is said to be worth about $140 billion at the end of March 2022. According to White House estimates, Russia’s gold reserves make up about 20 percent of the country’s total reserves.
Despite the fact that Russians are increasingly investing in crypto, there is still no clear legal framework for the cryptos. Various government structures have so far failed to reach a consensus on how to regulate that industry. On Friday, Russia’s Ministry of Finance submitted a different version of Russia’s crypto bill to the government, after the document was amended in line with comments from other ministries and regulators.
The Russian central bank is also very sceptical about cryptocurrencies. Earlier this year, chairman Elvira Nabioellina urged the state to ban Bitcoin.
Bypassing Western sanctions
Several Western politicians and pundits have already expressed their concerns that so many Russians are now using cryptos. It is feared that digital currencies are the perfect way to circumvent sanctions imposed by the West in response to the war in Ukraine. “It is very likely that Russia is trying to conduct business through crypto,” David Carlisle, director of policy and regulation at blockchain analyst Elliptic, said during a webinar on sanctions and crypto.
In the meantime, the West has already included cryptos in the sanctions package against the Eastern European country. The description of the fifth sanctions package states that there is now a ban on the provision of high-quality crypto-asset services to Russia. This should contribute to closing possible loopholes in the legislation.
Earlier this week, Bank of Russia deputy governor Ksenia Yudaeva reportedly argued that crypto sanctions evasion in Russia is “practically impossible”, especially for large transactions.
Similar ideas are coming from Changpeng Zhao, founder and CEO of the crypto trading platform Binance. According to him, Russians cannot use cryptos to escape western sanctions because crypto transactions aren’t anonymous.