This year might be a challenging one for cryptocurrency exchanges in Russia.
Recently, the Bank of Russia has given a recommendation on stock exchanges not to accept cryptocurrency-related companies.
This is in response to the growing interest among crypto companies with global operations to go public and join stock exchanges.
In a letter sent by the bank on stock exchanges, it says that it would be logical to stay away from companies (both local and foreign) who are involved in cryptocurrencies.
Blocking mass adoption
“The Bank of Russia’s recommendations aim at a preventive measure – they are designed to prevent mass investor adoption of such investments,” the bank said in a letter.
It added that local exchanges should avoid any digital financial assets not issued in Russia, crypto-tracking indexes, crypto derivatives and crypto funds.
On top of these things, the bank also recommended that asset managers should exclude any types of crypto-related instruments from being involved in mutual funds.
High volatility
One of the major reasons why the Bank of Russia released their anti-crypto recommendation on local exchanges is because of cryptocurrencies’ volatile nature.
Other risks that the bank sees are cryptos’ opaque price discovery, low liquidity, technology, and regulatory aspects. With these big risks, the bank is highly concerned that people who will venture into crypto-related investments might face big losses.
It also said that aside from its high volatility, people’s lack of knowledge and experience in cryptocurrencies is certainly another big risk for their funds.
The bank’s latest recommendation highlights Russia’s immovable stance against cryptocurrencies, which clearly says the country doesn’t have any plans to warm up on cryptocurrencies anytime soon.
Image courtesy of Cointelegraph News/YouTube
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