Russian Households Increasingly Turning to Cryptocurrencies Amidst Sanctions and Financial Instability
Central Bank of Russia Survey Shows Rise in Crypto Assets Among Russian Families
As sanctions placed on Russia for its invasion of Ukraine continue to make navigating the global financial market difficult, a new study has found that Russian citizens are increasingly turning to cryptocurrencies as a store of wealth. The Central Bank of Russia conducted the “Nationwide Survey of Consumer Finance Households,” which found that Russian families now hold more value in crypto assets than in mutual funds or gold.
Survey Details
The survey included over 6,000 households and 12,000 individuals in 38 regions across Russia and compared figures from 2020 to those from April to August 2022. The results showed that the average Russian household held 17,500 rubles (~$225) worth of crypto assets, with more than half of the families reporting holdings that exceeded the reporting threshold.
Crypto Adoption
While the percentage of Russian families holding Bitcoin and other cryptocurrencies is small at 0.4%, it surpassed the adoption rate of gold and mutual funds, each of which recorded a 0.3% adoption rate within the Russian population. The study’s findings appear to contradict previous government estimates about crypto, which put Russian adoption at 12% of the population.
Reason for Crypto Popularity
The increasing popularity of cryptocurrencies in Russia is likely due in part to their use as a workaround to sanctions, which included cutting off Russian banks from the SWIFT system. Despite the Central Bank of Russia’s disapproval of private cryptocurrencies like Bitcoin, it began allowing them to be used by companies and individuals to settle cross-border transactions in September.
National Crypto Exchange
The end of the second quarter could see the launch of a national crypto exchange in Russia, as lawmakers are currently working on plans for its establishment. Additionally, discussions are underway with Iranian lawmakers to develop a gold-backed stablecoin that would be utilized in foreign trade settlements.
Final Words
The results of the survey show that cryptocurrencies are gaining popularity among Russian families as they try to navigate the global financial market amid sanctions. While the percentage of families holding cryptocurrencies is still small, it has surpassed that of gold and mutual funds. The Russian government’s plans to launch a national crypto exchange and develop a gold-backed stablecoin show that they are recognizing the growing importance of cryptocurrencies in their economy.
Disclaimer
The information presented in this Blogpost is solely for educational and informative purposes and should not be misconstrued as investment, financial or legal advice. Cryptocurrencies are a highly unstable and speculative market and their worth is susceptible to substantial fluctuations. Therefore, it is advisable to conduct personal research and seek counsel from qualified experts before making any financial decisions.
