Russia’s Ministry of Finance has reaffirmed its cautious approach to the National Welfare Fund (NWF) investments, ruling out the inclusion of cryptocurrencies in the near future. Deputy Finance Minister Vladimir Kolychev stated that the current regulatory structure of the NWF, which consists of 60% yuan and 40% gold, will remain unchanged.
Kolychev cited the high volatility of cryptocurrencies as the primary reason for their exclusion from the NWF’s investment portfolio. He emphasized that the fund’s liquid assets need to be easily convertible without significant price fluctuations, a characteristic that cryptocurrencies currently lack.
The Deputy Minister outlined specific conditions that would need to be met before considering riskier assets like cryptocurrencies:
- The NWF’s liquid funds must reach 7-10% of Russia’s GDP.
- The country needs to achieve more diversified reserve portfolios.
Kolychev noted that Russia is still far from meeting these conditions, which explains the current focus on gold and yuan reserves.
Crypto Skepticism in Russian Financial Circles
The stance taken by the Finance Ministry aligns with the broader skepticism towards cryptocurrencies among Russian financial authorities. Central Bank Governor Elvira Nabiullina, known for her crypto-skeptic views, will have the final say on including cryptocurrencies in the NWF reserve.
This conservative approach contrasts with recent developments in the United States, where the Trump administration has signed an executive order to create a sovereign wealth fund, potentially including cryptocurrency investments.
Countries with Strict Bans
Algeria: The country has imposed a complete ban on the use and possession of cryptocurrencies.
Morocco: The government has banned crypto transactions, driven by concerns over money laundering and illegal activities.
Bangladesh: Since 2017, Bangladesh has maintained a strong stance against cryptocurrency, with strict crackdowns on crypto activities.
Egypt: In addition to economic and legal considerations, cryptocurrencies have been banned for religious reasons, as they were deemed contrary to Islamic law in 2018.
Iraq: The Central Bank of Iraq introduced a ban on cryptocurrencies in 2017, focusing on the risks associated with financial crime.
Countries with Partial Restrictions
China: One of the strictest countries regarding cryptocurrency, China has implemented comprehensive bans on crypto activities, prohibiting both trading and mining of cryptocurrencies.
India: While not outright banning cryptocurrencies, India has imposed high taxes and regulatory hurdles for crypto enthusiasts. There’s a 30% tax on income from crypto and all other virtual assets with no deductions or exemptions.
Turkey: The country has banned the use of cryptocurrencies as a payment tool, citing possible “irreparable” damage and transaction risks.
Qatar: While not entirely illegal, Qatar has banned cryptocurrency trading in the Qatar Financial Centre.
Future Considerations
While ruling out immediate plans for cryptocurrency investments, Kolychev did not completely dismiss the possibility for the future. He suggested that if the NWF reaches its desired levels, the ministry might consider different assets, including cryptocurrencies.
As global attitudes towards cryptocurrencies continue to evolve, Russia’s position on integrating them into national financial strategies remains cautious but open to future reassessment.
Angel Marinov is the Managing Editor at Coinlabz. With extensive knowledge of crypto payments and blockchain use cases, Angel is a trusted source of accurate and timely information
