In line with its tough stance on cryptocurrencies, the Central Bank of Russia (CBR) has issued a recommendation against listing securities linked to crypto assets on the country’s stock exchanges. The “preventive measure” has no impact on government-issued digital currencies.
Bank of Russia is concerned about the exposure of ordinary investors to crypto derivatives
Russia’s central bank, known as the Bank of Russia, has again raised its concerns about decentralized money. Cryptocurrencies and digital assets are characterized by high volatility, a lack of price transparency, low liquidity, technological, regulatory and other specific risks, the tax authority said this week, emphasizing:
The acquisition of related financial instruments carries an increased risk of loss for people without sufficient experience and knowledge.
The new warning came as part of a recently issued recommendation to Russian exchanges not to allow trading in domestic or foreign securities whose dividend payments “depend on cryptocurrency rates”. Among the unwanted financial products, the bank also listed those associated with “prices of foreign digital financial assets, changes in cryptocurrency and crypto-asset indices, and the costs of crypto derivatives and securities of cryptocurrency funds”.
The notification from the regulator also relates to financial instruments linked to the prices of tokens, which are defined as “digital rights” under current Russian legislation and are offered or accepted as a means of payment without currency. The central bank emphasized that these represent neither a Russian or foreign legal tender nor an international currency or unit of account.
According to the advisory letter from the Bank of Russia, asset managers should not include cryptocurrency investments in mutual funds. The CBR advised brokers and trustees to offer “pseudo-derivatives with such underlying assets” to unqualified investors.
These recommendations are intended as a “preventive measure”, stated the Russian central bank in the announcement. “They aim to prevent the offer of such instruments to the mass investor”, emphasized the regulatory authority.
The Bank of Russia noted that the restrictions do not apply to national digital currencies issued by governments or CBDCs. They do not affect digital financial assets issued under Russian law and by information systems the operators of which are registered with the Central Bank of Russia, the institute added.
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