Russians may suffer a significant loss of purchasing power if the exchange closes and the ruble plunges
It was reported by the site that the Central Bank of Russia once again suspended trading on the nation's leading Moscow stock exchange (MOEX) on Wednesday, and it won't be open on Thursday. As a result of Russia's ongoing military campaign in Ukraine, trading on MOEX has been stopped since Feb. 25.
Over the course of the past month, the exchange's index has lost over 34% of its value (without taking inflation into account) as Western leaders imposed crippling sanctions on Russia.
Additionally, the MOEX website has been offline since Monday, with Ukraine’s IT army claiming responsibility for the "hack." Meanwhile, the Saint Petersburg Stock Exchange (SPB) also remains closed but will open for limited trading on Thursday. Meanwhile, Dow Jones Russia GDR Index, which represents Russian stocks traded on the London Stock Exchange, has lost 93% of its value in the last five trading days, meaning the Russian markets will open with disastrous losses.
Theoretically, cryptocurrency exchanges, whether centralized or decentralized, are free from such intervention. Along with the sheer number of servers, centralized exchange servers may be located throughout the world or make their server locations secret. In this sense, governments may ban exchanges within their borders, but they cannot stop crypto traders from trading.
When it comes to decentralized exchanges, their peer-to-peer nature makes it possible for anyone with an internet connection to link wallets and trade cryptocurrency, making it difficult to enforce any type of ban altogether.
Even though Russian financial institutions can weather a stock market crash, this cannot be said for everyday Russians. MOEX alone has more than 17 million retail investors, and retail investors account for more than 40% of the country's equity trading volume. The sharp decline in ruble value will likely cause the retail investor community in Russia - such as pensioners and retirees - to suffer severe losses when markets reopen.
However, perhaps no better way to comprehend the dangers of centralized control of capital markets than through the archives of SPB itself. The SPB was among the world's top-performing stock markets during the imperial era. It even outperformed the New York Stock Exchange in the latter half of the 19th century.
Nevertheless, trading on SPB ceased at the outbreak of World War I and opened briefly after 1917's Russian Revolution. However, when the Bolsheviks took control, SPB was closed and investors who could not sell in time lost their money.