INTRODUCTION

The rapid development of the crypto market in recent years shows the futility of attempts to marginalise cryptocurrencies in general and bitcoin in particular. According to the head of the US Securities and Exchange Commission (SEC) Hester Peirce, the cryptocurrency market is ripe for institutional investors¹. The crypto market, like the stock market, has recently been rapidly falling due to problems in the global economy, thereby demonstrating an inextricable connection with the real economy. In the current circumstances, the decline in the activity of crypto investors (the predicted onset of the "crypto winter") gives national financial regulators time to develop balanced approaches to the regulation of crypto assets.

In the report of the Bank of Russia (2022) "Cryptocurrencies: Trends, Risks, Measures", the main emphasis was placed on the existing risks of using cryptocurrencies in connection with their spread in Russia. The regulator's decisions were tied to the need to tighten supervision over transactions using cryptocurrencies by creating a system for monitoring the risks associated with investments in cryptocurrencies. It is difficult to agree with this approach, since it does not imply the use of the potential of cryptocurrencies for the development of the digital economy in Russia, taking into account the opportunities available in the country to reduce the risks of their use. 

In addition, in Russia, the change in policy in the field of legalisation of cryptocurrencies is actualised in connection with the introduction of financial sanctions by unfriendly countries. Many foreign crypto exchanges have suspended services for users with Russian accounts. At the same time, in 2021 the volume of transactions of Russians with cryptocurrencies, according to the Bank of Russia (2022), reached $5 billion (about 350 billion rubles). It is obvious that Russians consider cryptocurrencies as an alternative investment tool, despite its high-risk nature. The need for such a tool is obvious against the backdrop of restrictions and instability in the domestic foreign exchange market, which greatly narrows the possibilities for Russian citizens to use traditional instruments for savings, which in recent decades have been the euro and the dollar. Interest in the use of cryptocurrencies is also demonstrated by businesses focused on imports and exports, as medium and small businesses can make payments in cryptocurrencies to circumvent various restrictions caused by financial sanctions.

The interest of citizens and businesses in cryptocurrencies cannot be ignored by the monetary authorities. In the context of sanctions against Russia, cryptocurrencies can become an important driver for the development of the digital economy, acting as a financial investment tool for citizens, a way to attract investment for high-tech start-ups, and a tool for settlements with importers and exporters from unfriendly countries. 

The main obstacle to the creation of a crypto market in Russia today is the negative attitude of the Bank of Russia towards crypto assets. It seems that this attitude is due to the fact that the Bank of Russia, as a mega-regulator of the financial market, will be responsible for supervising this new, emerging, and therefore unpredictable, market. Therefore, the Bank of Russia sees major risks in the development of the crypto market. Other departments, such as the Ministry of Finance of Russia, the Ministry of Energy of Russia and the Ministry of Industry and Trade of Russia, see not only risks, but also opportunities for the development of the Russian economy, especially in the face of sanctions pressure. They advocate for a more balanced approach to the regulation of crypto assets. To create and develop the crypto market in Russia, various Russian departments need to objectively assess the existing risks and develop a unified position on the regulation of cryptocurrencies.

CONSUMER RISKS

Since the emergence of Bitcoin, market participants have been predominantly crypto enthusiasts who had the necessary technical knowledge of the new technology and could manage the risks of using cryptocurrencies. As the crypto asset market expands, so does the diversity of its participants. This is happening not only at the expense of institutional investors, but also ordinary consumers who use cryptocurrencies both as an investment tool and as a payment method in the virtual space or in the real economy (if this is allowed in a particular country). In the context of legal uncertainty associated with the unwillingness of financial regulators to offer comprehensive regulation of crypto markets, risks for consumers of crypto assets are increasing. 

Financial regulators point out high risks for consumers associated with the following factors: high volatility of crypto assets; information asymmetry in the crypto market; cybercrime; lack of legal consumer protection mechanisms (EBA 2021; Bank of Russia 2022).