The Central Bank of Russia cautioned financiers on the hazards of backing cryptocurrencies according to the bank’s annual Financial Stability Report.
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Russia’s Central Bank assumes that cryptocurrencies carry high risks, and a potential “bubble” on the cryptocurrencies market may result in considerable losses for consumers, according to the regulator’s report released on Tuesday.
“A ‘bubble’ on the cryptocurrencies market may result in substantial loses for consumers. Also, there are risks that cryptocurrencies are used for money laundering and financing terrorism. The task of national and supranational regulators is to minimize those risks via developing a coordinated approach to regulation of the cryptocurrencies market and restricting the potential of high-risk investments and transactions,” the report stated.
Russian officials continue to increase the heavy regulation of cryptocurrency and blockchain technology as the nation reveals plans to enact an anti-VPN (Virtual Private Network) law according to local news outlet, RBK.
The state Duma will order “expert analytical research and opinion polls” relating to Blockchain for 2018.
The exploration will go to research “standard legal regulation of Blockchain technology uptake on Russian financial markets based on global experience,” the Duma’s financial markets committee and first vice-speaker Aleksandr Zhukov said.
Russia’s General Prosecutor said that a link was found in increased interest in cryptocurrencies like bitcoin and “laundering” of income “gained via illegal channels.”
Central Bank officials in the country have warned consumers about purchasing bitcoin calling the cryptocurrency a “pyramid scheme.”