“Bitcoin is a pyramid scheme and when you buy it, a person enters a minefield” – was what the deputy chairman of the Russian central bank, Sergei Shvetsov, said in an interview with Reuters.
According to him, many people invest in alternative instruments and often sell real estate or borrow money from relatives to “bury money in the field of miracles”.
“It is a big problem that our citizens are not familiar with the rules of the capital market, where the promised return reflects the level of risk. And if you want to gain many, many percent with that money, then the probability of losing everything is huge”, he added.
The vice president of the Russian Central Bank also recommended that all Russians who are not familiar with the financial market should not risk investing in cryptocurrencies.
He also said that the Bank of Russia will not legalize bitcoin and that people can lose money and the government will not be able to do anything.
“Buying bitcoin, a person enters a minefield, where, besides himself, he has no one to count on and no one can protect him. We also tell citizens about this that you don’t need to go to a place where you are not under the protection of the Russian Federation, where your money will simply be taken away and you can’t do anything about it.”
The Central Bank, he said, is actively carrying out explanatory work, “so that citizens are very careful with assets, behind which there is no consumer protection, no security, or a real economic process, but the Central Bank has its hands tied.”
“What we see on the market now are extraterritorial instruments”, said Shvetsov. “Russian brokerages licensed by the Central Bank do not provide access to cryptocurrencies, but citizens use the Internet and buy products from foreign suppliers.” complained.
According to a March 2021 investment survey, 52% of unskilled Russian investors have traded bitcoin.
In February, when bitcoin rose in price at an accelerated pace, the president of the Central Bank pointed to the high volatility of the cryptocurrency.
Using such an asset, she said, carries risks. Furthermore, “bitcoin can be actively used for all types of questionable transactions”, he added.
Shvetsov, who is curiously a former football player, continued to criticize bitcoin and described it as a “technological financial pyramid”.
He warned that Russia has no power to prevent such coups if people lose their funds.
“We start closing websites, banks stop payments. But there are other channels that appear very quickly where a person cannot be helped. For example, if he has a bitcoin account and the pyramid collects bitcoins. There is no way to block the transfer of your account to the financial pyramid account in bitcoins.”