Central Bank of Russia published on Thursday, July 22, a announcement and an explanatory letter urging the country’s stock exchanges not to leave investment products on the list of cryptographic products.
According to the letter of recommendation, the central bank ordered listed operators not to list securities, such as listed funds, which offer payments on the basis of cryptographic assets, securities issued by cryptocurrency-linked funds, digital assets issued abroad, and cryptographic prices. directories.
The regulator also does not want listing on cryptographic derivatives and cryptographic fund securities. In addition, the central bank ordered investment fund managers not to include cryptographic firms in their managed portfolios and advised trustees and intermediaries to avoid offering such securities to qualified investors.
The regulator accepted the recommendation to prevent retail investors from accessing products they do not understand. TIn its statement, the Central Bank of Russia stated:
“Cryptocurrencies and digital assets are characterized by high volatility, poor transparency of pricing mechanisms, low liquidity, technological, regulatory and other specific risks. Buying the investment products tied to them puts people with inexperience and skills at great risk of losing money. ”
The recommendations only apply to accredited private investors, and professional investors will continue to be given the opportunity to invest in cryptographic-related corporate shares.
However, the regulator noted that the ban does not apply to the central bank’s digital currencies (CBDC) or digital assets under Russian law in information systems whose operators are registered with the Central Bank of Russia.
Hard strain on encryption
The legislative recommendation comes when many cryptocurrencies move to major stock exchanges in Asia, Europe and the United States to get a public listing of their shares.
However, the Central Bank of Russia has been reluctant to allow cryptographic firms access to the mainstream financial sector.
Encryption assets were illegal in Russia until last year, when the central bank gave such digital assets legal status but banned their use for payments. The regulator argues that the Russian ruble is the only legal tender that citizens can use for financial transactions and payments.
The central bank sees digital currencies as the future of the financial system, saying that cheap and fast payment systems are needed, and central bank digital currencies can fill the gap.
The regulator argues that CBDCs are not the same as cryptographic assets like Bitcoin. According to the regulator, CBDCs are issued and supervised by the authorities and their values are pegged to a traditional currency such as the US dollar.
The Central Bank of Russia in September 2020 introduced add provisions to ban Russian officials from owning cryptocurrencies and to force election candidates to report their secrecy contributions.
October 2020, the central bank delivered a proposal to limit the amount of digital assets that non-professional investors can buy per year.
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