In a surprising turn of events, Vladimir Kolychev, deputy minister of the Russian Ministry of Finance said that the Russian Ministry of Finance has no plans to alter the National Welfare Fund’s current investment structure.
According to local media reports, Vladimir Kolychev stated,“He is unaware that Russia is considering establishing a cryptocurrency strategic reserve akin to the Trump administration’s proposal.”
The statement comes on the back of the extreme volatility that cryptocurrency assets have. Instead Russia plans on sticking to Gold and the CNY as the primary assets.
Russia Denies Plans of Crypto National Reserve
According to Kolychev, cryptocurrencies are not appropriate for the NWF due to their extreme volatility. Rather, Russia still gives solid assets like gold and the Chinese Yuan (CNY) top priority when it comes to its fund holdings.
This ruling demonstrates Russia’s cautious stance toward cryptocurrencies, emphasizing the need for more conventional and stable assets for long-term financial stability.
Russia’s dedication to upholding a cautious, steady reserve strategy as international financial systems change is indicative of its larger position on cryptocurrencies and the necessity of financial stability during unpredictable times.
The move also comes at a time when the larger users of crypto have seen a rise in Russia but the overall policies regarding mining, holding and transacting crypto have been rather strict.
Russia’s Worries Around Crypto Reserve Stem From Crypto’s Volatile Nature
With the worries about the extreme volatility of digital assets, Russia is not establishing a cryptocurrency reserve for its National Welfare Fund (NWF).
Even if cryptocurrencies like Bitcoin and Ethereum have become very popular around the world, Russia’s Ministry of Finance is still wary of them because of the possible dangers associated with such an erratic asset class.
Furthermore, Russia has maintained a comparatively conservative posture on cryptocurrencies, which is consistent with its overall regulatory strategy.
Russia hopes to safeguard its financial stability and lessen its susceptibility to market swings that can negatively affect its national wealth management plan by staying away from cryptocurrency reserves.
US Crypto Reserve Plan: What Is Russia Missing On?
Russia’s plan on not having digital assets as a part of its reserve might keep it a little behind on the global curve, especially considering that the US might be considering the option.
By diversifying the nation’s reserves and providing an alternative to conventional assets like gold and the US dollar, Donald Trump’s planned crypto reserve plan might benefit the US.
The United States may leverage the potential of digital assets as a hedge against inflation and economic instability by including cryptocurrencies like Bitcoin in its strategic reserves.
The decentralized structure of cryptocurrencies may offer a store of value that is less susceptible to changes in monetary or political regulations. Furthermore, by demonstrating faith in blockchain technology and virtual currencies, such a step may strengthen American leadership in the developing global digital economy.
Also Read: Russian Government Mandate Cryptocurrency Miners to Report Earnings by the 20th of Every Month