Does Cryptocurrency Pose a Threat to Financial Stability? Russia’s Central Bank Says Not at the Moment
It is one of the most important questions asked by establishment financial institutions when it comes to cryptocurrency: how much of a threat is it really? The answer is a bit more complex than a yes or a no. On May 30th, the Central Bank of Russia released a paper outlining the current danger cryptocurrencies (or crypto assets, as they are referred to as in the document) pose to the global financial system. While “cryptocurrency” is the term used by a majority of the user base, “crypto asset” has gained more popularity with institutions who are riding on the failure of this industry.
Cryptocurrency, since its inception, has had the intention of disrupting the financial stability of the world by offering people another option besides government-backed fiat. It is no secret that there are many people around the world who do not trust large institutions with having any control over their money, and with good reason. Faceless institutions like that have consistently been the downfall of many economies around the world and yet they frame the innovation of cryptocurrency as one that is so unviable you should not even try to use it.
The Russian government has already come out against certain cryptocurrencies and tokens that are intended to promote privacy and individual financial liberty. As a country run by autocrats and oligarchs, it makes sense that any system which has the potential to threaten their control would be discussed in such a light.
The reasons for Central Banks and governments to try and stoke FUD around the world and continue to laugh in the face of functional cryptocurrencies is to keep pushing the narrative that they are used only by scammers, criminals, and terrorists for illegal activity. While the anonymity usually associated with cryptocurrencies can seem attractive to a criminal wanting to stay in the shadows, most illegal activity is not carried out through the use of cryptocurrencies. If they want to point fingers at the “blood money” used by criminals, they really need to look no further than the US dollar.