Bank of Russia flags crypto and stablecoins as financial market risk

The Bank of Russia has identified cryptocurrency use as a financial market risk, warning that stablecoins and other digital assets could increasingly be used by Russians as substitutes for the national currency. Summary Bank of Russia has warned that stablecoins and other digital assets could increasingly be used as substitutes for the ruble. The regulator said crypto investments carry a risk of complete losses and raised concerns over anonymous and decentralized transactions. Unlicensed crypto operators could face criminal liability, while regulated firms that break market rules could face administrative penalties. Rosfinmonitoring has gained authority to oversee crypto transactions, while clients of Russian digital depositories will be required to provide their tax identification numbers. The central bank outlined the concerns in its review, “Main Directions for the Development of the Financial Market of the Russian Federation for 2027 and the Period of 2028 and 2029,” where it warned about potential losses for investors and risks tied to crypto activity outside national jurisdictions. Bank of Russia sees stablecoins as a risk to the ruble The regulator said increased use of digital currencies, particularly stablecoins, could lead households to use privately issued assets in place of the ruble. Investments in cryptocurrencies carry the possibility of a complete loss of invested funds, according to the central bank. Unlike traditional financial instruments, what the regulator described as “money surrogates” may lack an obligated counterparty or underlying collateral. Investors could therefore have no party against which to make a claim if the value of an asset collapses. Some cryptocurrencies create another area of concern because transactions can take place through decentralized networks while providing varying degrees of anonymity, the central bank said. It linked those characteristics to increased risks of digital currencies being used for illegal activity. Crypto markets operating across borders can limit the effectiveness of restrictions imposed by individual governments, according to the review. Countries have taken different approaches to regulating the sector, with some already applying strict requirements while others are still developing their rules. You might also like: India, Russia discuss CBDC payments as bilateral trade nears $60 billion The Bank of Russia said the lack of a uniform international approach could create conditions for an unregulated segment of the market to develop, leaving measures introduced by individual countries insufficient to contain some of the risks it identified. The warning comes shortly after Russia opened a regulated domestic cryptocurrency market under central bank supervision. Russia’s first comprehensive framework for crypto trading, custody and cross-border settlements took effect Sept. 1, allowing investors to access approved digital assets through regulated intermediaries. crypto.news previously reported that non-qualified investors can purchase up to 300,000 rubles of eligible cryptocurrencies annually through each intermediary after completing a required test.