With the emergence of digital ruble, Russian economist foresees a grim outlook for Bitcoin.
Alexander Razuvaev, a renowned Russian economist and member of the supervisory board of the Guild of Financial Analysts and Risk Managers, has recently made predictions about the future of Bitcoin following the introduction of a Russian CBDC.
According to Razuvaev, the emergence of digital currencies like the digital ruble and other CBDCs will lead to a significant decrease in their value. However, he clarified that cryptocurrencies will not disappear completely, but rather become less prominent.
Razuvaev pointed out that the current state of the cryptocurrency market is “greatly overheated” due to an unsustainable surge in demand. He predicts that cryptocurrency prices, including Bitcoin, may rise in the short term, but he expects potential instability after April, possibly referring to the anticipated bitcoin halving event.
Explaining the volatility of cryptocurrencies, Razuvaev emphasized that their value is determined by demand, which makes them a risky investment compared to traditional financial assets. Nevertheless, he remains optimistic about the future financial landscape and suggests that the introduction of digital versions of major world currencies could create a “better world” for investors.
Drawing historical parallels, Razuvaev compared the cryptocurrency craze to the Dutch tulip mania of the 17th century, highlighting the common pattern of speculative investment leading to losses. However, he believes that the cryptocurrency market is different from traditional “financial pyramids” and has the resilience to survive in some form.
Regarding the digital ruble, Razuvaev has previously mentioned that the adoption of CBDCs, including Moscow’s digital ruble, is a growing trend that will accelerate with technological advancements. He controversially suggested that Moscow might eventually require pensioners to receive payments in digital rubles.
In the midst of these discussions, Elvira Nabiullina, the Governor of the Bank of Russia, has reported progress in the pilot testing of the digital ruble. The pilot included comprehensive tests, such as consumer-to-consumer transactions and retail payments, with over 25,000 transactions recorded. The success of the pilot indicates the potential impact of the digital ruble on the nation’s economy, with a tentative launch date set for no earlier than 2025.
While Russian regulators maintain a cautious approach towards cryptocurrencies, they have not completely dismissed the potential for legal investments in the digital asset class. At a recent forum, the Bank of Russia clarified its stance, stating that while cryptocurrencies will not be recognized as legal tender in the country, the possibility of legal investments in cryptocurrencies remains open. However, this is conditional on the investor’s ability to adequately assess and understand the risks associated with such investments.
