Russian Central Bank Isn’t Ready to Legalize Cryptocurrency Just Yet

In an unsurprising turn of events, Russia’s central bank has issued a warning about cryptocurrency ICOs. Given the fact that other countries around the world have done the same, that is only to be expected. However, the central bank also stated its view that the time is not right to legalize cryptocurrencies. That is pretty surprising, as it had appeared Russian officials were preparing to do exactly that sooner rather than later.

Bitcoin Won’t be Legal In Russia Anytime Soon

People who have been monitoring the cryptocurrency situation in Russia over the years may have noticed how the government is not too keen on Bitcoin and the like. This is likely because it is not easy for a government to regulate cryptocurrencies. The Russian central bank is exploring the idea of potentially issuing its own digital currency using the blockchain. For the time being, this project seems to have been put on ice, although anything could change in this regard at any given time.

In its latest communication, Russia’s central bank issued some interesting comments. Firstly, it has decided to warn the public about the risks associated with cryptocurrency ICOs. After all, we all know how these investment schemes are potentially dangerous for novice investors. Although most ICOs are perfectly legitimate, there is always a chance things will go awry. Since none of these crowdfunding ventures are officially regulated, the burden of investing rests solely on the shoulders of individuals.

Russia’s statement regarding ICOs reads as follows:

“Operations with cryptocurrencies carry high risks both during exchange operations, including due to sharp exchange rate fluctuations, and in the case of raising funds through the ICO (Initial Coin Offering – a form of attracting citizens’ investments in the form of issuing and selling new cryptocurrency to investors / tokens).”

However, what may interest people more is the country’s stance toward regulating and legalizing Bitcoin and other cryptocurrencies. Earlier this year, it appeared legalization would only be a matter of time, but things have taken a turn for the worse. According to the central bank, the time is not right to legalize cryptocurrencies, as it is far too “premature” to do so. That is an interesting take on things, considering more consumers and corporations have been showing an interest in cryptocurrency since the start of this year.

In a way, this confirms the stance that the institution has maintained regarding cryptocurrencies since early 2014. At that time, the central bank issued an official warning regarding the dangers associated with cryptocurrency and how consumers should avoid unnecessary financial risks associated with the nascent industry. No other entity is allowed to issue money in the Russian Federation besides the central bank, and it seems this hesitant stance toward cryptocurrencies will be maintained for quite some time to come.

That being said, the central bank is still collaborating with other federal bodies to actively monitor the cryptocurrency situation. Regulation of some sort is still on the agenda, although it remains to be seen how things play out in this regard. There is no legislation prohibiting the use of cryptocurrency in Russia, though, which means most activities are still considered as somewhat “OK”. Uncertainty should be taken into account at all times, though, as regulators have the right to crack down on any types of activity they consider to be inappropriate.