Once again, the Russian central bank has repeated its negative stand on Bitcoin (BTC). One of the bank’s top executives has compared the flagship crypto with a pyramid scheme. The first deputy governor at the Bank of Russia, Sergey Shvetsov, expressed the authority’s worries over crypto investments in an August 11 interview.
Shvetsov warned about the supposed risk of losses by the investors who choose to join the highly volatile market. He mentioned that local investors have been increasingly pouring their funds into alternative financial instruments which he termed as “technological financial pyramids.”
In the same context, the top bank executive referred to bitcoin as one such pyramid scheme. He explained that most retail investors expect massive returns from crypto investments, selling their real estate investments or taking loans to invest in bitcoin and several other top cryptos despite the ‘massive’ risk that exists 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.”
The Bank of Russia has already expressed its fears over the growing number of local retail investors investing their money in bitcoin. The executive insisted that the Russian government does not hold any responsibility for losses incurred by crypto 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.”
Previously, Shvetsov made similar remarks about the crypto sector, saying in 2021 that the Bank of Russia does not recognize cryptocurrency purchases as an investment and urged the government and financial watchdogs to discourage Russians from acquiring crypto investments.
As previously noted, the Bank of Russia has been also prohibiting local banks from offering cryptocurrency services. But, crypto investment has been becoming more popular in Russia.
Based on a report published by the World Gold Council, crypto had become the fifth-most popular investment tool in Russia after foreign currencies, savings accounts, real estate and life insurance in 2021. It was even ranked slightly more popular than gold investments.