Publication date: 20 Jan 2022

The volume of betting in online gambling using cryptocurrency increased from 15.7% in the third quarter of 2020 to 43.3% in the third quarter of 2021. This is according to the results of a study conducted by SoftSwiss.

• The first reason for this rapid growth can be attributed to the increase in digital consumption around the world.
• The second reason is that gambling companies are investing more and more in marketing. This leads to an increase in the popularity of online gambling and betting among young players over the age of 21. Young people are actively using cryptocurrencies in their daily lives and are consequently using them for virtual betting. This is reflected in the increasing share of cryptocurrency in iGaming.

Which cryptocurrencies are the most popular in online gambling?

• According to research, bitcoin is firmly in the lead among cryptocurrencies used in the iGaming industry. Thus, in the second quarter of 2021, it dominated with a share of 78.5%, and in the third quarter, it already had a share of 86.6%.
• Ethereum is second in terms of usage frequency, with 9 and 6.4% in the same periods.
• Litecoin is in third place with 4.5% and 3.5% in the second and third quarters of 2021.

How much do Russians invest in digital assets?

Russian citizens own 5 trillion roubles in cryptocurrencies, said Anatoly Aksakov, the Chairman of the State Duma Committee on Financial Market. According to him, this is a signal to the authorities – it’s time to start actively streamlining regulatory measures, because such amounts attract unqualified investors.

According to statistics, Russia led the world in the number of shadow transactions related to cryptocurrency, with a share of 41.1%. Government officials have also drawn attention to the growing amount of digital funds involved in dubious transactions.

The future of cryptocurrency in Russia: opinions and possible ways forward

Now Russia is at a crossroads: to act like China or Turkey with their total rejection of “new money”, or to choose soft legalisation, like in Japan or Singapore, where cryptocurrency can be paid for by individuals. At the same time, the El Salvador option with its full legalisation, in Russia is minimally possible.

At the moment, the state regulator Bank of Russia has made its position on cryptocurrency very clear, noting that regulators in Russia have no need for it. Therefore, they won’t allow this type of digital asset to be recognised. Officials have no intention of sharing anything, much less their financial power over the country.

According to the officials, it is necessary to convey to the Russian population that cryptocurrency will not receive official status and recognition. Cryptocurrency owners continue to invest in digital assets with the hope that they will someday be legalised, but this is an extremely risky venture and a mistake. In addition, while the authorities are thinking, the cryptocurrency market may collapse at any moment, leaving depositors with empty pockets.

The Prosecutor General’s Office has already issued regulations to confiscate and seize cryptocurrency money if a user owns it illegally. According to Igor Krasnov, who serves as Russian Attorney General, the new norms stipulate that illegally circulating crypto-assets are not only a criminal item, but can also be seized and arrested on legal grounds.

The official noted that the Prosecutor General’s Office is in favour of implementing the term “cryptocurrency” in legislation for its uniform and sustainable use.

However, the chief prosecutor didn’t share the ways in which law enforcement is going to seize and arrest cryptocurrencies. Due to cryptocurrency’s high level of security, all options (voluntary transfer, seizure of unique SSID phrase, freezing of assets through regulated cryptocurrency exchanges) seem unlikely.

As a reminder, Russian Federation continues to attract digital money miners due to inexpensive electricity and “loose,” unclear regulation of mining. Tens of millions of dollars’ worth of mining equipment is being imported into the country. This very fact worries border guards, although so far, the law has not prohibited this activity yet. However, the Bank of Russia has already formed a working group to deal with cryptocurrency issues.