The number matters: how cryptocurrency works in the Russian economy
In September, the law on the regulation of the cryptocurrency market came into force in Russia. The number of Russian residents who have invested in this digital asset is constantly growing. Deputy Finance Minister Ivan Chebeskov estimated their number at 20 million people. The turnover of cryptocurrencies is becoming an increasingly widespread phenomenon, which raises many questions. Whether the crypt is a money sterilizer (and thus a barrier to inflation), how much of the funds invested in virtual currencies are already working in the economy, and whether it is necessary to stimulate the development of cryptocurrency turnover — in the "Izvestia" material.
Not sterile
According to Ivan Chebeskov, Russians have invested 3.7 trillion rubles in cryptocurrency. This, of course, cannot be compared with the volume of term deposits (68 trillion rubles), but it is comparable with the capitalization of some of the largest companies on the Moscow Stock Exchange. And this figure is growing faster than in other sectors. The turnover of cryptocurrencies per year significantly exceeds this amount, since, according to the same Ministry of Finance, about 50 billion rubles pass from hand to hand per day. Accordingly, the annual amount exceeds 18 trillion.
What does such a passion for cryptocurrencies lead to? One can certainly say what the crypt is not exactly. At all times, there were certain assets that absorbed part of the money supply and thereby reduced the rate of price growth (for example, in the USSR, one of these "instruments" along with government bonds was banal vodka).
Cryptocurrency does not apply to such instruments at once for several reasons. When citizen A buys a cryptoactive asset from citizen B for rubles personally or through an exchanger, the money supply does not decrease. Rubles do not disappear and are not withdrawn by the regulator (as happens when buying OFZs from the Ministry of Finance or when depositing funds in the Central Bank). The money simply goes to the seller, who can take it to the consumer market the next day, purchase real estate or a car, accelerating inflation further.
If the cryptocurrency is bought abroad or through the withdrawal of rubles into currency / stablecoins outside the Russian Federation, these rubles are sold on the market, which puts direct pressure on the exchange rate of the domestic currency. And its weakening imports inflation into the country. Therefore, instead of "sterilization", the crypt often, on the contrary, works as a devaluation factor.
Cryptocurrency, according to "Finam" analyst Alexander Potavin, is a high—risk way of saving and a channel for external payments.
— When citizens buy crypto assets instead of goods, currency or real estate, it slightly reduces consumer demand. But since the crypt can be quickly sold and used to buy currency, goods or other assets, it cannot be said that this money is withdrawn from the economy. The economy is deprived of money invested in the crypt only if it is used as a channel for withdrawing capital from Russia," the source explains.
Three baskets for the crypt
At the same time, a significant part of this amount is already working in the Russian economy. These funds can be divided into three baskets.
The first and most important part is foreign trade and cross—border settlements. Due to the disconnection from SWIFT and the threat of secondary sanctions against banks in friendly countries (China, Turkey, the UAE), a significant part of parallel imports, from microelectronics to automotive components, are now paid for through stablecoins. In this segment, crypto capital works for the real sector, ensuring the influx of goods and curbing shortages, and hence supply inflation.
— The most useful application of crypto assets is foreign trade calculations, — confirms Alexander Potavin. — Under the conditions of sanctions, the crypt gives exporters and importers an additional channel for making payments. For this purpose, stablecoins are most suitable, rather than key cryptocurrencies, since they are unstable in price.
The second application is mining infrastructure. Russia confidently holds the second place in the world in bitcoin mining due to the energy-deficient regions of Siberia. The funds invested in the purchase of transformers, the construction of data centers and the payment of electricity are direct capital expenditures within the country, which create jobs and generate taxes. The demand for this infrastructure will grow in the coming years, as will the turnover of funds in this sector.
The remaining funds (according to various estimates, about half of the total amount) are more or less dead weight. These are classic savings in "cold" wallets (as an alternative to cash dollars under the mattress) and speculative capital on foreign exchanges. This money does not contribute to Russian GDP, does not work in the credit system, and carries the risk of sudden blockages by Western compliance services.
It cannot be banned or legalized
The question of whether to stimulate this market is the main line of institutional conflict between financial authorities.
The Bank of Russia takes a conservative position, advocating a slowdown and restriction of the retail crypto market. The regulator's logic is clear: if millions of unqualified investors carry their savings not to banks or the stock market, the economy will lose investment resources for structural adjustment. The Central Bank also sees the risks of a massive loss of funds by the population in an ultra-volatile market. Hence the initiatives to introduce strict limits for retail and a categorical ban on the use of cryptocurrencies as a means of payment within the Russian Federation in order to prevent the undermining of the role of the ruble.
The Ministry of Finance approaches the problem more pragmatically: it is physically impossible to completely limit the use of cryptocurrencies, since 20 million people are already in this field. If the restrictive policy is continued, their capital will forever remain offshore. The task of the Ministry of Finance is to "pull wallets" into the Russian legal plane: to allow licensed brokers, introduce transparent taxation and launch trading on domestic exchanges. All this will make it possible to additionally attract tens and even hundreds of billions of rubles to the national budget.
In the coming years, the state will have to develop a differentiated approach, abandoning the binary choice between total prohibition and complete freedom.
The optimal strategy is to boost the crypto infrastructure for the inter-firm transaction interaction (B2B) and foreign trade sectors. The second direction is the creation of legal instruments for qualified investors to bring these 3.7 trillion rubles out of the shadows under taxation in the Russian jurisdiction. At the same time, the massive retail hype needs to be severely cooled.
"There is no need to raise domestic demand for bitcoin and other digital assets, as this may increase the outflow of funds from deposits and create risks of financial losses," Alexander Potavin sums up, stressing that the compromise between the Central Bank and the Ministry of Finance should be based on using cryptocurrencies solely as a tool to circumvent sanctions on the external circuit, without the right to move within the country..
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