Bitcoin and other cryptocurrencies have been tagged with a ‘bubble’ warning time and again and one such warning has been reissued by the Central Bank of Russia warning investors to refrain from cryptocurrency because of the risk involved.
In a report entitled ‘Financial Stability Report’ the central bank said that investors and consumers should be wary of a cryptocurrency market ‘bubble’ that could lead to losses. The report also mentioned that bitcoin and other cryptocurrencies are being used for money laundering and financial terrorism.
The warning by Russia’s central bank isn’t the first one as it issued a public notice recently in September that centered on initial coin offerings (ICOs) and cryptocurrencies. Russia’s central bank first issued a warning on cryptocurrencies in early 2014, setting the precedent for a hostile stance that, until recently, had authorities pressing for laws that would criminalize and even imprison bitcoin adopters.
The latest report also points out the coordinated approach between ‘national and supranational regulators…[for the] regulation of the cryptocurrencies market and restricting the potential of high-risk investments and transactions.’
Russia has been threatening to block access to bitcoin exchange websites altogether, citing “unreasonably high risks” for citizens investing in cryptocurrencies. Earlier this month, Russia’s minister for communications and mass media Nikolai Nikiforov absurdly summed up bitcoin as a “foreign project” that will not be considered as a legal entity in Russia.
However, Russian president Vladimir Putin has personally mandated the country’s prime minister and the head of the central bank the to draft a framework to regulate initial coin offerings and cryptocurrency mining operations, as well making a call to determine cryptocurrencies’ legal status in the Russian Federation, before a July 2018 deadline.