Fitch: Proposed Russian Crypto Ban Eases Risks May Curb Innovation

Fitch a credit rating firm published a study paper on Russia’s proposed cryptocurrency prohibition on Friday.

iexclusive News Nigeria reports that despite the fact that the research agreed with the Central Bank of Russia’s (CBR) stance that the ban would reduce the risk exposure of Russia’s financial system.

It also warned that such a suggestion could “slow the proliferation of productivity-enhancing technologies.”

Fitch warning:

“Suppose this slows the spread of crypto-driven innovations that, for example, improve the speed and security of payments or asset liquidity via tokenization. In that case, it could over time weaken this aspect of the Russian banking sector’s operational environment relative to peers.”

According to Fitch, the adoption of a central bank digital currency, or CBDC, in Russia “should increase the authorities’ capacity to monitor and manage financial flows, which might otherwise be eroded by the growth of cryptocurrency transactions.”

According to the report, one of the primary reasons for the CBR proposing harsh cryptocurrency restrictions may be to reduce competition against its upcoming CBDC.

Russia’s crypto regulatory environment, like India’s, has recently been chaotic, with policymakers frequently oscillating between outright bans on digital currencies and calls for an established regulatory framework.

At the same time, former Russian President Dmitry Medvedev commented on the proposed crypto ban, as reported by local news outlet rbc.ru on Friday and translated by Cointelegraph:

“I’ll say it frankly — when they try to ban something, it very often leads to the opposite result of what is intended. But the position of the Central Bank has, of course, its own reasons, which are also known to everyone.”