The Russian Central Bank has reported a rise in activities related to cryptocurrencies. It comes to 16.4% in terms of traffic volume to crypto websites. Numbers reported by the Central Bank are from the fourth quarter of FY2023 to the first quarter of FY2024. The rise in the traffic volume is up in comparison to the second and third quarters of 2023. Activities have increased on exchange platforms and peer-to-peer platforms.
A precise reason has not been stated by authorities for the rise.
The number of visits went up to 104.6 million collectively, with the average monthly number of unique Russian IP address-holders amounting to an increase of 15.1%. Activities suggest that Russian residents are more interested in Bitcoin (BTC) and Ethereum (ETH). It further elaborates that they use US Dollar-pegged stablecoins like USDT and USDC.
Transactions that are potentially attributable to Russians come to approximately $50.2 billion. The Russian Central Bank has utilized the Transparent Blockchain tool to arrive at the calculations. Developed by the Federal Financial Monitoring Service, also known as Rosfinmonitoring, the tool was originally crafted to tackle money laundering via cryptocurrencies.
Activities further include payments for goods & services and remittances.
Regulators have taken note of the activities and have issued a warning, stating that cryptocurrencies could be risky. The risk does not necessarily pertain to cryptocurrencies alone, for they could potentially include the chances of evading possible sanctions.
One reason crypto-related activities spiked could be the exit of Binance from the Russian market.
Reasons could also include the rising tension between Moscow and the West, which is forcing people to look for alternatives—cryptocurrencies. However, the risks of losing funds cannot be ruled out since it would only take a minute for stablecoin issuers to block targeted users.
It is still possible that Russia may take the matter into its own hands and follow the path of the US and the UK. Both countries have started to tighten regulations over cryptocurrencies and their transactions. This is also the same thing that may happen to Russia if other countries do it within their boundaries. Meaning, exchange platforms on the US and UK soil can end up blocking a set of users.
The Russian Central Bank has hinted in the report that domestic financial providers should not offer financial instruments linked to crypto assets.
That said, the global market cap of crypto has gone up by 0.70%, and there has been a significant rise in 24-hour volume by 20% at the time of writing this article. Bitcoin and Ethereum dominate the sphere with a share of 52.5% and 18.3% respectively.
There is a notable rebound in the token valuation of both flagship digital assets.
While a sharp rise in crypto-related activities in Russia may not have had a huge impact, it is only safe to assume that dynamics will shift in the future for Russia and the rest of the world.