12% of the global capitalization of cryptos would be in Russian hands 

12% of the global capitalization of cryptos would be in Russian hands

According to a study by the Kremlin, Russians are estimated to own the equivalent of $214 billion in cryptocurrencies. This is a huge amount of money that could move away from the spectre of a ban advocated by the country's central bank to a regulated approach, as called for by Vladimir Putin himself.

Russians reportedly hold 12% of global cryptocurrency capitalization.

Yet in spite of a tortuous national context, between a central bank that is tempted by a ban and Vladimir Putin who expresses his own more measured view, Russians are said to be among the largest holders of cryptocurrencies on the planet. And it is the Kremlin that is saying so. In fact, according to a Bloomberg article, the Russian government conducted an investigation, on the basis of the IP addresses of users of the main local exchange platforms, and has produced some impressive figures.

For example, the report estimates that Russian citizens' crypto holdings are worth around 16.5 trillion rubles. In US dollars, this represents 214 billion, or 12% of the world's total market capitalisation. This is a proportion that is far from negligible, in particular as it is certainly underestimated. But as in many authoritarian countries, it is easy to imagine that a fringe of the population, wary of the authorities' bloodshed, has protected itself from a possible cut-off by taking shelter behind VPNs or other subterfuges to carry out its transactions in complete discretion.

In any case, the fact is that the figures are quite high in comparison. It represents, as the American media point out, a third of the capitalization of the benchmark stock market index (the MOEX) grouping together the most important companies in Russia. On the other hand, it is no big surprise that people in Russia are crazy about the development of cryptocurrencies. More or less recent studies have established this and in 2020 they were in second in importance behind Ukraine. It is an irresistible movement that has gained a lot of momentum at the beginning of the pandemic, when in particular measures were introduced to address the savings of residents.


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Russian authorities' hesitations being resolved

In fact, in the face of such a providential windfall, it is not surprising that both the central bank as well as the Russian government are in a state of hesitation. The first one has adopted a Chinese-style position, while the second, with the support of Putin himself, is advocating a well-regulated policy approach.

The position of the former is perhaps explained by the fact that the FSB, which is worthy successor of the Soviet KGB, has been alarmed that cryptocurrencies have the potential to fund opposition organizations. The head of the Kremlin was obviously not sensitive to this argument, citing the country's competitive advantages in bitcoin mining.

It is likely that in this context, it is the central bank that will very quickly review its copy. The Minister of Finance, Anton Siluanov, has indeed just presented a proposal suggesting the legalization of cryptocurrency trading via the banking system.

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