THE POSSIBILITIES OF CRYPTOCURRENCY IN THE RUSSIAN MARKET
Cryptocurrency, which emerged in 2007, has evolved into a valuable digital asset that garners attention not only from entrepreneurs but also from various segments of the global audience. Its widespread coverage in the media, endorsement from opinion leaders, and support from online platforms have contributed to its status as one of the most widely discussed topics worldwide.
The growing interest in the cryptocurrency market and blockchain technology has led to continuous advancements in these areas. The introduction of altcoin technologies in 2011, which allowed the creation of various cryptocurrencies at lower prices, attracted a new audience to crypto investments. Consequently, the cryptocurrency segment continues to expand with new projects offering more reliable, convenient, and flexible functionalities.
This global trend towards cryptocurrency adoption extends to the Russian market as well, considering its unique characteristics, audience interest in crypto products, and the government’s involvement in the digital market. Experts believe that the potential for the crypto segment in Russia is just beginning to gain momentum, paving the way for the introduction of new crypto products and services.
To delve deeper into the demand for cryptocurrency in the Russian market and explore the future prospects of this industry, QB Agency specialists conducted an analysis of the segment.
Russian Citizens’ Trust in Cryptocurrency
An opinion poll conducted by the Institute of Public Opinion “Anketolog” surveyed 1,600 Russians from various socio-demographic backgrounds about their attitudes towards cryptocurrency. The research produced the following findings:
The majority of internet users in Russia (70%) have at least heard of cryptocurrency, with 23% having a good understanding of it. Only 7% of respondents first heard about it during the survey. Notably, those respondents whose income level is above 70,000 rubles (comprising 37% of the total respondents) possess knowledge and comprehension of crypto products. This group predominantly consists of men (33%), with fewer women (15%).
Now, let’s return to the group of 70% who are familiar with cryptocurrency. The most intriguing part is here. Among them, 54% are willing to store their savings in digital assets, while 14% have already engaged in buying or selling cryptocurrency. Additionally, 49% are contemplating the idea of converting a small portion of their savings into digital assets, while 5% plan to transform a significant part of their monetary assets into cryptocurrency.
To say that cryptocurrency is not in demand among Russians would be incorrect. In fact, many Russian citizens are interested in or already using this digital asset. Additionally, the higher a person’s income level, the more likely they are to interact with crypto products.
However, opinions about the future of cryptocurrency are polarized. One group of respondents views cryptocurrency as a temporary phenomenon or an unsafe method of storing and investing money (36% each). Meanwhile, another group sees it as a means of achieving freedom, anonymity, and independence from banks, organizations, or governments (29%), and as a natural evolution of commodity-money relations (27%). Only 13% of respondents see cryptocurrency as an illegal means of money laundering.
Despite this, 65% of those who are familiar with cryptocurrency do not believe that it will become a part of people’s daily lives or be used to pay for purchases and bills. However, 4% believe the opposite, and 31% are more positive than negative about its potential.
Russian Cryptocurrency Transactions in 2022
In 2022, an increasing number of companies and services are providing their customers with the option to pay with cryptocurrency. While this payment method was once primarily reserved for luxury goods and NFT auctions, it has now become a popular way to purchase VPN services, especially for Russian users. At present, several leading VPN providers in Russia, including ExpressVPN, ProtonVPN, and Surfshark VPN, accept cryptocurrency payments.
Moreover, cryptocurrency investments have been making inroads in the real estate industry both within and outside of Russia for some time now. As early as 2017, M9 Development began selling houses in the Moscow region for bitcoins, and during the pandemic, Russians began using cryptocurrency to buy real estate in other regions to ensure the security of remote transactions. With the current sanctions restrictions in Russia, cryptocurrency transactions are often the only means of acquiring real estate assets abroad since several Russian banks have been disconnected from global payment systems, limiting Russian customers’ access to foreign currency accounts. Additionally, many countries have legalized cryptocurrency transactions related to real estate.
For instance, the United Arab Emirates approved payments in cryptocurrency in 2017, leading many developers to add this payment option for their customers. In 2022, a significant developer, Damac Properties in Dubai, began allowing customers to purchase real estate using Bitcoin and Ethereum. The developers argued that cryptocurrency transactions would become more comfortable for customers worldwide, including a significant percentage of Russian investors.
Cryptocurrency transactions have been legalized in several countries including Germany, Turkey, Georgia, and the USA, but there are important caveats to consider. In Turkey, standard cryptocurrency transactions are not possible to confirm payment for products or services. However, some agencies act as intermediaries by accepting digital funds, converting them to regular currency, and transferring them to the seller’s account. In Georgia, cryptocurrency is considered an asset, not a payment instrument, and transactions are based on the barter principle. For instance, a buyer exchanges digital currency for real estate, with the purchase price written in ordinary currency in a contract.
Apart from online services and real estate purchases, Russians have been exploring cryptocurrency for other economic transactions. For example, Emirates, the largest airline carrier, has started accepting payments in cryptocurrencies for air tickets in 2022. This move is aimed at providing faster and more flexible interaction with customers, with plans to use blockchain technology to track aircraft data and share information more quickly in the future.
Additionally, crypto savings have also become a topic of interest in labor relations. Zavod IT, a Russian company, offered its employees the option to receive their wages in cryptocurrencies such as Bitcoin, Ethereum, XRP, and USDT. The founder of the company, Alexander Protsyuk, stated that while the majority of the salary would still be paid in fiat currency, the situation may change when relevant legislative drafts are developed.
According to multiple sources, currency operations have become the most popular transaction involving cryptocurrencies for Russians. This shift in preference is believed to be a consequence of the sanctions policy towards Russia. Kaiko, an analytical platform, reported that the trading volume of USDT for rubles hit a ten-month high at the end of February 2022. Bloomberg later calculated that USDT trading volume for rubles was 2.6 billion rubles on March 5, 1.4 billion rubles on March 6, and the volume of transactions with bitcoin reached 2 billion rubles.
According to an interview with Kommersant, representatives of Russian financial companies have confirmed the growth trend of cryptocurrency transactions. Roman Nekrasov, the co-founder of the ENCRY Foundation, noted an increase in customers at offline cryptocurrency sales offices, while Andrey Podolyan, the Marketing Director of the Cryptorg Exchange, stated that the volume of cryptocurrency transactions is growing, particularly on peer-to-peer (p2p) platforms. Additionally, there has been a rise in demand for hardware cryptocurrency wallets in Russia, with prices for these services changing significantly. According to Nekrasov, before crypto wallets cost up to 10 thousand rubles, but now they can cost up to 50 thousand rubles. The fact that one of the most popular manufacturers in the Trezor segment has stopped delivering to Russia further indicates the high demand for such crypto products on the market. All of these developments suggest a significant shift in Russians’ attitudes towards crypto products, from being viewed as a risky investment tool to a convenient monetary asset for various online transactions.
How to Use It for Advertising
According to research conducted by the Institute of Public Opinion “Anketolog,” it is evident that a majority of Russians are interested in cryptocurrency to some extent. However, while some have already incorporated it into their daily lives, as verified by various sources in 2022, others are willing to invest a portion of their savings in it, having only heard about cryptocurrency. In fact, the latter group constitutes the majority.
From a global standpoint, both of these groups can be regarded as a potential audience for promoting crypto products in the Russian market. Nonetheless, it’s necessary to recognize their different demands for better results. The first group includes individuals who are seeking more convenient and promising crypto services and, as a result, require comprehensive information about the products’ benefits. The second group needs to learn about general trends and concepts in the crypto market since the majority of them are unfamiliar with the topic.
Promoting in both groups necessitates a high proportion of expert content from advertisers. Because of this, successful crypto advertising campaigns are primarily conducted in partnership with thought leaders in this area on popular Russian social networks like Telegram (where cryptocurrency ranked third in terms of thematic content turnover in 2021), Yandex Zen, and VKontakte. Other Russian services whose audiences are currently growing are also expected to be promising soon.
All of these factors must be considered when developing a campaign to promote crypto products in Russia. Furthermore, it is essential to mention the state regulation of this issue, as stated in the “On Digital Financial Assets” law. QB Agency experts are available to help at every stage, offering a wide range of effective promotion strategies and a more comprehensive analysis of the Russian crypto market.