Lower rates will lead to capital outflow from banks
Russians are more and more interested in cryptocurrencies
It is unlikely that Russia will pass a bill banning cryptocurrencies
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Not all Russians are ready to invest in high-risk assets, even if deposit rates fall to lows. At the same time, the interest of Russian residents in cryptocurrencies is steadily increasing. How will the investment portfolio of the country’s citizens change when deposit rates fall after the Central Bank’s interest rate has been cut to 4.5%? BeInCrypto talked about this with the founder of the Garantex cryptocurrency exchange Sergey Mendeleev.
– How the reduction in rates on bank deposits in Russia will affect the interest in cryptocurrencies?
CM .: A decrease in profitability on bank deposits will lead to dissatisfaction among depositors, but is unlikely to provoke a massive influx of Russians into the cryptocurrency market. The average size of Russian deposits is 140-220 thousand rubles. A decrease in profitability on such deposits will not affect very seriously, the lost profit for such depositors will be a couple of thousand rubles a year. This is not the kind of money that will push people to study some new investment products, obscure technologies..
I am inclined to believe that a decrease in interest rates on bank deposits will lead to an even greater outflow of money from deposits in Russian banks, because amid the financial crisis and the crisis, the authorities simply do not want to trust their savings, albeit small ones, to financial institutions that are associated with the same power. Moreover, this year our legislators have given the population an ambiguous signal about a possible increase in taxation on income from deposits, on income in general, on stricter monitoring of financial transactions between individuals. And this is in a country where the volume of “gray” salaries is estimated at 13 trillion rubles! Only 20 years have passed since the then current President Boris Yeltsin “firmly and clearly” stated that there would be no devaluation. And we all remember that the ruble then collapsed. All this causes panic among Russian investors who trust something stable and reliable, such as gold or the American dollar, but not high-risk bitcoins or other cryptocurrencies..
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Bitcoin continues to show high correlation with fluctuations in the stock market so far. So, in March, when American stock indexes collapsed, Bitcoin followed after them. They began to recover and Bitcoin began to rise. But like other high-risk assets, its scope is stronger. Where the leading benchmarks drop 15%, Bitcoin will lose all 50%. People who consider $ 2000 to be savings are most likely not ready for such a risk..
Nevertheless, the growing interest of Russians in cryptocurrencies is observed. Since March, both the number of active users (+ 25%) and the volume of transactions (+ 20%) on our crypto exchange have grown sharply. Much of this growth has been fueled by the self-isolation regime, which has given some people more free time. But these are not the people who kept $ 2000 in rubles on a deposit for the sake of 8% -9% annual return..
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– What cryptocurrencies will Russians invest in??
CM .: The main interest of Russian users, as, indeed, throughout the world, is directed to the largest and most famous cryptocurrencies. First of all, it is, of course, bitcoin. It has already been tested by time, so to speak about the 10-year life of an asset. It is already clear that this is not a fraudulent scheme, not a scam, whose organizers will one day run away with all the investments of investors. In second place in terms of popularity, I see not ether, but stablecoins. First of all, stablecoins – in literal translation from English “stable” coins – continue to gain popularity in the digital asset market. With … More Tether (USDT), which, despite all the scandals and rumors around collateral, occupies 80% of the stablecoin market. Stablecoins are popular not only among crypto traders, investors and those who believe in a great future for bitcoin. They turned out to be very useful for entrepreneurs who work with foreign counterparties. Stablecoins can be quickly transferred to an overseas counterparty account, and can fit on a small flash drive. According to my observations, the circle of stablecoin users is wider than that of Bitcoin..
– How interesting are cryptocurrencies to Russian investors in the current economic realities?
CM .: As for the impact of the absent cryptocurrency legislation in Russia, it should be understood that those investors who, in principle, are considering investing in cryptocurrencies, are not very worried about possible restrictive measures in one particular jurisdiction. We saw how cryptocurrency exchanges were banned in China, but has there really been less Chinese from this on other, already foreign cryptocurrency exchanges??
People who are considering the possibility of investing large funds in bitcoin or other tokens, of course, no law will stop.
I do not believe that the bill prohibiting all transactions with cryptocurrency in Russia will be adopted in the current version. It received such a flurry of criticism, including from relevant ministries such as the Ministry of Economic Development and the Ministry of Justice, that I assess the likelihood of its adoption in this prohibitive version as extremely low. Now there is an active search for a reasonable compromise. I suppose that as a result, regulation will be adopted that will allow only licensed operators to trade cryptocurrency, for which serious requirements (KYC / AML) will be prescribed for the verification and identification of users and countering the financing of terrorism and money laundering. Those services that will not be able to obtain such a license, but will continue to provide services for the exchange of cryptocurrency for fiat, will fall under the article on illegal business or illegal banking..
Much more important are the nuances of currency legislation and, in particular, 115-FZ, because of which there are already difficulties in exchanging half a million dollars for rubles in a bank without providing a document on the origin of the funds. For those who prefer to invest in the good old American dollar, it is easier to buy stablecoins USDT and safely store their savings, just not under a pillow or in the basement, but on a secure flash drive from which no one can steal, arrest or seize them.
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CONTENT Russians have begun to invest more often in crypto deposits KYC has a positive effect on the adoption of cryptocurrencies in Russia The adoption of the law will not affect …
CONTENT Experts are confident that the litigation with Tether will drag on for years It is time for the market to take a closer look at other stablecoins USDT stablecoins …
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