Russian Citizens Are Using P2P Bitcoin Markets to Escape Monolithic Banking System

Paxful peer-to-peer Bitcoin marketplace has released some important data regarding the use of its p2p trading platform in Russia. The study indicates a rising interest in the use of cryptocurrencies in the country. The research comes at an important time when the Russian government has been trying to make it even more difficult for citizens to use crypto assets.  

Crypto Usage Gains Traction

For several years, Russian lawmakers have been contemplating whether to legalize or ban cryptocurrencies. As a result, they created an atmosphere that has left the entire crypto industry in the nation in an uncertain state. Despite these hindrances, Russian users joining Paxful cryptocurrency exchange have risen by 350% over the last 12 months.

Paxful data indicates that new registrations have increased on a monthly basis since the new COVID-19 outbreak began in March. The last three months have experienced a 42% rise in the activity on the Paxful P2P trading platform, with May seeing the best monthly performance amid the coronavirus crisis.  

According to Paxful research, the COVID-19 pandemic is one of the main drivers of growth. The interest of Russian citizens turning to cryptocurrency trading increased to combat inflation during the coronavirus pandemic.

Due to economic difficulty caused by the COVID-19, citizens have been turning to an alternative finance system, a trend that has become more apparent in the region.

Anton Kozlov, Paxful’s manager from the Russian market, said that:

“Crisis aside, Russia has always had a monolithic banking system that is dominated by a few players, and the sentiment we get is that Russians are increasingly looking to find alternative ways to grow their earnings and participate in the financial markets. Bitcoin within the P2P context allows them much more freedom to do so – and our data is proving it.”

Russians prefer using payment methods like online wallets, debit/credit cards, bank transfers, and gift cards in the region.

The study shows that Paxful is now experiencing an average monthly trading volume of $4 million in Russia.

Russia’s Central Bank Insists Crypto Is Criminal

Meanwhile, the state Duma of Russia passed a law that grants legal recognition to cryptocurrencies, but prohibits the use of cryptocurrency to pay for services and goods. The bill says that crypto users will not be able to use Bitcoins and other cryptocurrencies as a form of payment, but would have to conduct business payment with fiat money.

Despite the Duma state passing the bill, Russia’s central bank has, however, maintained that cryptocurrency transactions are not considered as legal investments. Regulation is, therefore, set to be discussed in the autumn session where the final law would be drafted.