Russia's New Crypto Rules Risk Pushing Market Deeper into Shadows

Russia's new cryptocurrency regulation may have unintended consequences, warns Eduard Kolozhvari, head of the Higher School of Business at NSUEM. According to Kolozhvari, making the market more transparent could push some participants towards even more closed schemes.

The Bank of Russia has softened its approach, allowing citizens to work with cryptocurrency through state-controlled platforms, albeit with volume restrictions. This opens up possibilities for investors to buy digital assets within the Russian infrastructure, but may prove too rigid for those who used them as an alternative payment method.

Kolozhvari notes that central banks worldwide are trying to curb illegal money circulation and are tightening control over cryptocurrency. However, regulating its payment function in informal settlements is difficult. The more restricted the official circuit, the higher the risk of operations moving outside its boundaries.