Bank of Russia speaks out about the risks of using cryptocurrencies
"There is a risk of undermining monetary circulation and loss of sovereignty of the national currency, as well as increased risks of the flow of savings from the traditional financial system to the unregulated segment of cryptocurrencies, which threatens to reduce the financial stability of banks. If the market continues to grow and banks and other traditional market participants are involved on a large scale, there is a risk that financial intermediaries will bear the liquidity risk, market risk and credit risk typical of cryptocurrencies, and the interconnectedness of large financial institutions may spread such risks to a wider range of market participants and to the real economy," the Central Bank said in its annual report.
The regulator also warned of the risks to citizens.
"The spread of cryptocurrencies in Russia also poses threats to the well-being of citizens - the growth of the cryptocurrency market largely reflects the formation of a "bubble" in the market, cryptocurrencies have characteristics of financial pyramids, opportunities for legal protection of investors are extremely limited, investments in cryptocurrencies can be completely lost due to both the volatility of the rate and due to fraud and cyber threats," the document says.