When it comes to cryptocurrency, Russia has been at the forefront of the discussion about how to regulate it, with some estimates saying that taxing digital currency transactions could help the country a lot.
According to Kommersant, a report by the MEXC cryptocurrency exchange, up to 60% of Russians’ crypto wallets are in a “dormant” state. This is because investors prefer to store crypto rather than speculate, with up to 60% of Russians’ crypto wallets in this state.
People in the market say this is because they think that cryptocurrencies are long-term investments, but strict market regulations also discourage people from investing in digital assets.
Nikiita Soshnikov is a director of the Alfacash cryptocurrency exchange. He says that for the last year and a half, the percentage of Bitcoin wallets that are “sleeping” has been rising, and that Russia is one of the top five countries for this.
In 80 percent of the accounts, there were no changes for 4 months.
Over the past four months or so, MEXC estimates that more than 80% of Russian accounts were not used. However, 68% of these users checked into their accounts at least three times a year, which means they didn’t lose their passwords at all.
Andrei Gusev, the managing partner of Borenius Russia, said:
“The lack of movement on them indicates that Russians do not consider cryptocurrencies as a means of payment, but tend to see them as a way to enrich themselves over a long distance.”
Roman Nekrasov, the founder of the ENCRY Foundation, says that the strategy of accumulating long-term cryptocurrency assets has become more popular around the world in the last few years.
It seems to me that a lot of people in Russia are among the so-called “first adopters of Bitcoin.” The latter became interested in the virtual currency in its first five years and didn’t want to sell it.
Russia’s bill to regulate crypto
A lot of things aren’t clear in Russia when it comes to how they will regulate cryptocurrency. The Russian government and the Central Bank of Russia want to make a law about how digital currencies can be used in the country by February 18. They had originally planned to do this on February 11.
A transition period for taxing money made from cryptocurrency transactions is also being debated by the Ministry of Finance.
There are also a lot of people who say Russians won’t want to give up their cryptocurrency holdings even after the bill is passed. This is because they want to keep their money private. The head of EXANTE, Jnis Kivkulis, said that cryptocurrencies in Russia “will remain an iceberg, 90% of which is hidden from view.”
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.