Russia's top digital bank wants to offer crypto — but tough central bank policy stands in its way
Tinkoff, the biggest online bank in Russia, wants to offer cryptocurrency trading to its clients but says this will take time due to a tough stance from the country’s central bank.
Oliver Hughes, Tinkoff’s CEO, said Thursday there were “qualified investors who know what they’re doing” who want to invest in crypto, but that his company isn’t currently able to offer them those services.
“There’s no mechanism for us to offer that product to them in Russia at the moment because the central bank has got this very tough position,” he told CNBC’s Hadley Gamble at the St. Petersburg International Economic Forum.
Russia gave cryptocurrencies like bitcoin legal status in 2020. However, it banned digital assets from being used in payments, saying that only the Russian ruble could be considered legal tender.
Earlier this week, Russian central bank governor Elvira Nabiullina told CNBC that digital currency was the “future for our financial system.” But she was referring to central bank digital currencies, or CBDCs, rather than crypto.
Unlike cryptocurrencies, which are designed to be decentralized, CBDCs are issued and controlled by authorities. Like China and the U.S., Russia is also currently exploring a digital version of its currency.
Alexander Shulgin, CEO of Russian e-commerce firm Ozon, said a digital ruble would help his business.
“If everyone has the opportunity to pay with digital currency online, it’s (an) easier transaction for companies like us,” he told CNBC Thursday, also speaking from SPIEF.
Governments have become increasingly wary of cryptocurrencies, due in no small part to their use in illegal activities like money laundering and terrorist financing.
Digital assets are also incredibly volatile, with the price of bitcoin having fallen from a record high of $64,829 in April to as low as $30,001 the following month.
Hughes said he recognizes concerns over the use of crypto in money laundering, as well as retail investors “who see cryptos glittering at the moment and maybe make poor investment decisions.”
But he added professional investors are warming to the asset class.
“Hopefully over time this will evolve and we’ll be able to achieve the aims of the central bank, making sure there’s no money laundering issues, making sure we’re protecting investors, but also offer products in a responsible way,” Hughes said.