According to a recent report from Russia’s central bank, the number of Russian users trading cryptocurrencies is declining. The bank noted that the number of legal entities and individuals involved with cryptocurrencies in Russia dropped to only about 800 people, down from almost 2,400 at the end of 2020. The central bank attributed the decline to the government’s strict regulations and the associated high costs that make it difficult for traders to comply with the rules. The central bank also suggested that the decline may have been due to an increase in investment in other, less volatile assets. The report also noted that only seven companies in Russia are currently operating legal cryptocurrency exchanges, down from around 50 at the end of 2020. This decrease in the number of legal cryptocurrency exchanges could be linked to the fact that Russia has yet to develop a regulatory framework that accommodates the industry. In addition, the Russian government has yet to issue any official guidance on how to handle taxation of cryptocurrency trades.
