Recently, the Central Bank of Russia proposed that traditional stock exchanges be allowed to trade in digital assets. According to industry watchers, the regulator wants to offer investors an opportunity to trade cryptocurrency in controlled environments.
Russian Stock Exchanges to Lend Digital Financial Assets to Central Bank of Russia
Central clearing counterparties and stock exchanges may be permitted to facilitate trading in digital financial assets (DFAs), which is a term that encompasses tokens and cryptocurrencies under Russian law. This proposal was made by the Central Bank of Russia at a meeting of brokers, exchanges and information system operators. These are entities that crypto platforms relate to.
According to the Kommersant, representatives of major brokers such as the Moscow Exchange or SPB Exchange, as well information system operators who have the right issue digital financial assets, met on Tuesday with Bank of Russia officers behind closed doors. They discussed the CBR’s proposed new scheme to arrange the trading and distribution of DFAs as well as the useable digital rights (UDRs).
Some crypto-related activities in Russia were regulated with the law “On Digital Financial Assets,” which went into force in January 2021, including issuance of digital coins (digital financial assets) and fundraising through tokens (digital rights). Other operations, such as trading and mining, or the distribution of cryptocurrency, remain unregulated. A new law “On Digital Currency,” authored by the finance ministry, aims to change that.
A source from Russia’s financial sector, who took part in the meeting, told the business daily that the exchanges and the brokers supported the idea to trade digital assets, which would expand the array of financial instruments available to them. The proposal was also met with suspicion by the operators of information systems.
The fear is that stock exchanges will be admitted to the market, which could jeopardize digital asset platform’s business. These platforms haven’t had sufficient time to grow. They also warned about the challenges associated with the use of blockchain technology and slower operation of existing exchange platforms.
Moscow Exchange officials, however, expressed their appreciation for the initiative and said they were open to further discussions. “The concept involves the use of existing exchange and settlement infrastructures. This will contribute to the concentration of liquidity, which has been confirmed by the global practice of secondary circulation of both fiat and digital assets,” they noted during the talks.
Pavel Utkin (a Parthenon United Legal Center lead lawyer), stated that Bank of Russia intends to take control of the DFAs in circulation, and to make their trading more like the stock market. “Since the regulator has lost the battle with the Ministry of Finance to block the circulation of cryptocurrencies in the country, it is necessary to create a platform that will make it possible to control the circulation of these assets,” the expert elaborated.
Is it possible for the Central Bank of Russia to control cryptocurrency trading in Russia? Please share your thoughts in the comment section.
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