Russia’s central bank has shown objection to the introduction of cryptocurrencies-related financial services. Such offerings, according to the monetary authority, would be detrimental to Russian investors because they are extremely hazardous.
The Russian Central Bank is not allowing financial services for crypto assets.
The Central Bank of Russia (CBR), which is notorious for its tough stance on cryptocurrency legality, has denied a plea from the financial sector to allow the provision of crypto-related services. The regulator announced during a meeting with industry representatives to discuss the prospects for the Russian stock market’s future.
According to a recent revelation, financial companies have raised the possibility of permitting crypto investment in the Russian Federation.
The monetary policy regulator responded to their recommendation by saying:
“The provision of services connected to operations with crypto assets and derivatives on such assets by financial institutions does not match the interests of investors in the financial market and poses considerable risks,” according to the Bank of Russia.
The central bank has also rejected the industry’s demand to expand the practice of issuing Russian financial instruments in foreign fiat currency, according to the press statement.
The Bank of Russia has always taken a cautious approach to the Russian ruble’s status as the country’s sole legal tender, which it wishes to safeguard. The CBR continues to oppose the open circulation of bitcoin and other cryptocurrencies, as well as their usage in payments.
Cryptocurrencies have been referred to by the Russian monetary authorities as “money surrogates,” which are illegal under Russian law. It’s also working on creating and issuing its digital ruble, with trials set to begin in January 2022 after the platform’s prototype is completed by the end of this year.
While the law “On Digital Financial Assets,” which entered into effect in early 2021, only partially regulates cryptocurrencies in Russia, their appeal as an investment alternative has grown dramatically. Cryptos and other alternative assets account for more than half of non-qualified Russian investors’ portfolios, according to CBR survey results.
The Bank of Russia recommended domestic stock markets to avoid trading financial instruments linked to cryptocurrency assets and prices in July. The authority warned that their inclusion “increases the danger of losses for persons who do not have sufficient experience and understanding.”
Asset managers should not include cryptocurrencies in mutual funds, and brokers and trustees should not offer “pseudo-derivatives with such underlying assets to ineligible investors,” according to the bank. Russian lawmakers are considering imposing limits on the amount of money that individuals can invest in cryptocurrency.