Just over a month after China shut down its crypto exchanges, Russia might be following suit.
The Central Bank of Russia has said it plans to take down the bitcoin exchange websites. The news did what it does best, bringing about price volatility. Bitcoin shed roughly US$600 almost instantly. It has since recovered however.
First Deputy Governor of the Bank of Russia Sergei Shvetsov announced:
‘We can not stand apart. We can not give direct and easy access to such dubious instruments for retail (investors)…
‘We think that for our citizens, for businesses, the usage of such cryptocurrencies as an investment object carries unreasonably high risks.’
The development certainly has come as a surprise. Russia was seemingly warming up to crypto markets recently.
Only last month, Finance Minister Anton Siluanov seemed to support bitcoin, commenting:
‘There is no sense banning them [digital currencies], there is a need to regulate them.’
And just last week, he outlined that Russia was considering adding cryptos to its financial literacy strategy. Which would have introduced cryptocurrencies to the classroom, preparing their finance students for the future.
Well, that idea went out the window quickly.
Even Vladimir Putin has voiced his criticism of bitcoin, according to Russia Today. Russian state media says Putin has warned of the risks that come with digital currencies, including:
‘…opportunities to launder funds acquired through criminal activities, tax evasion, even terrorism financing, as well as the spread of fraud schemes.’
Reasons for the backflip in opinion are unclear as yet. But, apart from the minor price shock, the market appears unfazed.
Unlike China, Russia is relatively small in the crypto market, so the news didn’t hit as hard.
China’s Bitcoin Backflips Continue
Speaking of China, the government may in fact be double-dealing.
Rumours that the Chinese government has actually entered the crypto market continue to surface. That’s in spite of their supposed crackdown.
On 10 October, a token called Biance was updated, which showed who the developer was. It was a joint-stock commercial bank called Ping An Bank Co Ltd. An organisation that has had government ties in the past.
On the same day, China Bitcoin also had an update. This time the developer was the Xiamen Local Taxation Bureau — an official land tax department. Cointelegraph.com speculates:
‘Maybe Ping An Bank’s involvement can be explained as commercial activities, but Xiamen Local Taxation Bureau’s control over China Bitcoin demonstrates the Chinese government’s interest in ICO and Bitcoin.’
It’s still only rumours at this point, but it wouldn’t surprise us if it were true. We firmly believe that no government can afford to ignore bitcoin.
And you shouldn’t ignore it either. It could be a once-in-a-lifetime event to potentially make some serious profits. For more information, we’ve got a detailed report to get you started. Don’t miss out, grab your free copy right here.
Junior Analyst, Money Morning