Fitch states that the proposed Russian crypto ban is likely to ease risks but curb innovation
Fitch, the credit rating agency, has published a research piece regarding Russia’s proposed ban on cryptocurrencies.
Although the report has agreed with the Central Bank of Russia’s (CBR) position that the imposed ban would limit the exposure of financial systems towards risks, it has also cautioned that this kind of proposal could potentially hold back the diffusion of technologies that are able to “improve productivity.”
Fitch also warned that if this ban slows the adoption and spread of crypto-driven innovations, it would then not improve the speed and security of payments or even asset liquidity via tokenization. In that case, it could actually weaken the aspect of
Russia’s banking sector’s operational environment in relation to peers gradually.
In addition, Fitch also commented that the adoption of a central bank digital currency, or CBDC, in the Russian territory should be welcomed, adding that “the digital rubble” must ideally increase the authorities’ capacity of monitoring and managing financial flows, which would otherwise get 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.
Similar to India, the Russian crypto regulatory environment has also been facing chaos lately, wherein policymakers have frequently been oscillating between an outright ban on digital currencies parallel to demanding an established regulatory framework for the same.
Simultaneously, even the former Russian President Dmitry Medvedev had offered his comments concerning the crypto ban proposal as reported in the local news outlet rbc.ru in which he said that “frankly”, whenever the government tries banning something, most often it tends leading to the opposite of what was being intended.
But in this case, the position of the Central Bank had been known to everyone now.
