The Central Bank of Russia (BCR) is looking at ways to integrate crypto assets and blockchain technology into its local financial system amid a pile of global financial sanctions..
In a CBR Telegram post on November 7, the central bank shared a public consultation report titled “Digital Assets in the Russian Federation”.
In the The possibility of the State affected by the sanctions opening its national market to foreign issuers of digital assets, especially those from “friendly countries”, is being studied..
Other areas of focus in the report are regulation of digital assets, protection of retail investors, digital property rights related to smart contracts and tokenization, as well as reformed tax and accounting proposals..
The CBR stated that it strongly supports the “further development of digital technologies” provided they do not create “uncontrollable” financial or cybersecurity risks for consumers.
Despite the novelty of blockchain technology, the CBR said that the same regulatory rules regarding the issuance and circulation of traditional financial instruments should also be extended to digital assets.
The CBR said that short-term regulation should focus on protecting investors’ rightsstrengthening the rules for admitting a digital asset into circulation, ensuring that the issuer is accredited, and ensuring that the issuer discloses all relevant information to investors.
The central bank’s message on Telegram, originally drafted in Russian, said that, Although the legal framework for digital assets has been created, it is necessary to improve the regulation for its continuous development:
“Russia has created the necessary legal framework for the issuance and circulation of digital assets […] But so far the market is at the initial stage of its development […] and it is many times lower than the market for traditional financial instruments. Its further development requires better regulation.”
Regarding the regulation of smart contracts, the central bank acknowledges that a legislative framework already exists. Nevertheless, proposes that smart contracts created in Russia be independently audited before being deployed.
The CBR was also positive about the potential for off-chain tokenized assets.. However, the bank noted that legislation would need to be put in place to ensure that there is a “legal connection” between the token holder and the token itself.
The report is produced when the Russian Ministry of Finance recently approved the use of cryptocurrencies as a cross-border payment method by Russian residents on September 22.
Nevertheless, the 33-page CBR report made no reference to the increased sanctions that have been imposed on Russia and the crippling effect it has had on its economynor did he discuss the Russian-Ukrainian war currently taking place in Ukraine.
Nevertheless, mentions a separate report it is working on, which focuses on Russia’s central bank’s new digital currency (CBDC) – the digital ruble – which is expected to be piloted in early 2023.
In August 2022, the Central Bank of Russia stated that it planned to extend the digital ruble to all Russian banks in 2024..
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