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Tuesday, July 16, 2024

Bitcoin has ‘no future’ – Russian finance official

The top cryptocurrency is not a reliable tool for investment due to its volatility, Anatoly Aksakov claims

The cryptocurrency market is extremely unpredictable and cannot be viewed as an alternative to traditional financial services at a time of global uncertainty, according to the head of the Russian State Duma Financial Market Committee.

Anatoly Aksakov told the Parliamentary Newspaper on Wednesday that for Russians it is better to invest in the country’s digital financial assets (DFAs). The issuance of DFAs will be accelerated this year, the lawmaker noted.

Read more: Bitcoin market copies Wall Street crash

“I am rather wary of bitcoins. The price of the crypto has now risen again due to instability on the American financial market amid concerns of a possible crisis. Of course, when such signs occur, investors are looking for alternative assets where they can invest money. Obviously, bitcoin seems attractive to them,” he argued.

Aksakov, however, stressed that the price of bitcoin is highly volatile, with investors risking major losses.

“The cryptocurrency market today is extremely unpredictable, and, in my opinion, bitcoin has no future. Therefore, I would not advise investing in it, but would keep money in Russian digital assets that are starting to appear on the market. This year, we expect a serious promotion of the issuance of digital assets, secured, among other things, by natural resources and the potential of companies,” he explained.

Read more: Russia might accept Bitcoin as Western sanctions intensify

DFAs, like cryptocurrencies, are based on blockchain technology. However, unlike the crypto, operations with them are centrally managed. In Russia, DFA issuance is regulated by the Central Bank, with companies required to register as information system operators.

A total of 2 billion rubles (over $26 million) worth of DFAs have been issued in Russia in the past year, according to the general director of the tokenization service Atomyze, Ekaterina Frolovicheva. The law on DFAs, regulating their issuance and use in Russia, took effect in January 2021.