September 24, 2023

Bank of Russia Doesn’t See Place for Crypto in the Financial Market

Even before presenting its comprehensive view regarding crypto regulations, the Russian central bank has indicated that it doesn’t see any place for digital currencies in the financial market of the country. Moreover, the monetary authority has also announced that it has successfully completed the development of the prototype of its own digital currency. When it comes to legalizing cryptocurrencies, the Central Bank of Russia (CBR) is now working on a report that will shed some light on its perspective in detail. Speaking to the Russian media, Deputy Chairman Vladimir Chistyukhin said that the regulatory authority is planning to push for legislative changes to oversee the circulation of digital assets.

He spoke to the reports in the lower house of the Russian parliament, known as the State Duma, and said that the legislation would be amended for resolving the issue. He added that they would provide a more accurate definition of how cryptocurrencies should be traded. According to the official, Russian businesses and citizens have the right to buy and keep crypto, but they cannot use the financial intermediaries and infrastructure of the country to do so. He had said so when questioned if the Russian central bank is in favor of imposing a ban on transfers to crypto exchanges from the accounts of citizens of Russia. 

This month, the Duma will hold the first meeting of a working group that’s developing crypto regulations. This will begin with a review of the report from the CBR and the announcement that had been made back in November by Anatoly Aksakov, the head of the Financial Market Committee of the parliament. Talking about the report, Chistyukhin commented that they don’t really see a place for crypto in the financial market of Russia. His statement comes after sources had disclosed that the CBR was considering imposing a ban on crypto purchases in Russia.

The chairman of the CBR, Elvira Nabiullina had also said in a press conference on Friday that the bank is skeptical of crypto and added that the Russian financial system couldn’t facilitate crypto transactions. The CBR has also been working on developing a central bank digital currency (CBDC) and Olga Skorobogatova, the First Deputy Chair, disclosed that they had completed the prototype of the digital ruble. She also revealed that the agency was planning on starting a pilot program with the digital currency in January, after the holidays. 

In the first couple of stages of the digital currency’s trial, a number of Russian banks will participate and this will continue throughout the year. Bank of Russia had explained earlier in December that credit organizations will also be invited for carrying out consumer-to-consumer operations in the first stage. The second stage will involve financial intermediaries, including the Federal Treasury, when they will test transactions between corporate entities and private individuals. A digital version of the Russian ruble had first been considered by the CBR nearly three years ago and had decided to explore the possibility of issuing one last year. In October 2020, the regulator published a consultation paper and reached out to players in the financial sector for feedback. 

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