Fitch says Russia crypto ban may slow down the Innovations

The Credit rating Agency shared its point of view on the crypto ban proposal of the Russian Central bank.

In the last few months, the Bank of Russia (CBR) did a lot of research work in order to bring better ban laws on the crypto industry in the Russian Federation. In the very starting, many factors hinted that Russia will ban crypto like China but now the situation is changing. Reportedly the Russian Finance Ministry and President Putin are in favour of crypto adoption. 

On 28 January, Fitch, a Credit rating agency, published on the decision of the Russian Central Bank to ban crypto in the Russian Federation. 

Fitch stated that the crypto ban Proposal of the Bank of Russia is good to some degree in terms of eliminating the threat on the financial systems of Russia but in another perspective, it is not a good decision because it will slow down the growth of efficient payment systems which are possible with crypto and blockchain-related development work. 

Fitch stated negative circumstances of this decision:

“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.”

The credit rating agency also stated on the Central Bank Digital Currency (CBDCs) adoption. Fitch emphasized Russia to work on increasing its ability to track financial transactions with Digital Ruble, otherwise, Russia will lose ability slowly after the evolution of the crypto industry. 

Fitch also noted that there are chances that the Central Bank wants to slow down the competition for the rollout of Digital Ruble, more likely Chinese CBDCs rollout which entered the world with a crypto blanket ban. 

In the last few days, the Russian crypto community took a pleasant breath because of Putin‘s statement on crypto mining industry adoption and the finance ministry’s Proposal of crypto regulation. 

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