Buying Bitcoin is like entering a minefield, Bank of Russia exec says

Aug 12, 2021 | CoinTelegraph News | 0 comments


The Bank of Russia has expressed concerns over the increasing number of local investors pouring their money into Bitcoin.

The Russian central bank has once again reiterated its negative stance on Bitcoin (BTC), with one of the bank’s top executives comparing the cryptocurrency with a pyramid scheme.

Sergey Shvetsov, the first deputy governor at the Bank of Russia, expressed the authority’s concerns over cryptocurrency investment in a Wednesday interview, warning about the perceived risk of losses by investors.

Shvetsov said that local investors have been increasingly pouring their money into alternative financial instruments that he referred to as “technological financial pyramids,” stating that Bitcoin is just one of such pyramid schemes. He said that many retail investors expect huge returns from cryptocurrency investment, selling their real estate holdings or taking loans in order to invest in Bitcoin despite the “huge” risk of losing all their money.

“When buying Bitcoin, a person enters a minefield, and there is no one to rely on besides himself, and no one can protect him,” Shvetsov argued. The executive emphasized that the Russian government holds no responsibility for losses by cryptocurrency investors:

“There is no need to walk where you are not protected by the Russian Federation, where your money would be simply taken away, and you will not be able to do anything about it.”

Related: Russian court orders Sber to unblock account used for Bitcoin trading

Shvetsov has previously made similar remarks about the cryptocurrency industry, stating last year that the Bank of Russia did not recognize crypto purchases as an investment and calling on the government and financial intermediaries to discourage Russians from buying cryptocurrencies. As previously reported, the Bank of Russia has been also withholding local banks from offering crypto services.

Cryptocurrency investment has been increasingly popular in Russia, however. According to a report by the World Gold Council, cryptocurrency was the fifth-most popular investment tool in Russia after savings accounts, foreign currencies, real estate and life insurance last year, and was ranked slightly more popular than gold investment.

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