The Central Bank of Russia has published research (1) on digital assets that examines how the technology may be incorporated into the country's established financial system. In the midst of a wave of new financial penalties, the Central Bank of Russia (CBR) is exploring methods to incorporate blockchain technology and crypto assets into its domestic financial system.
What the report says
The CBR issued a public consultation study titled "Digital Assets in Russian Federation" in a Telegram message on November 7. It evaluates whether the sanctioned state may allow international digital asset issuers, especially those from "friendly countries," access to its domestic market.
The paper also includes recommendations for reforms in accounting and taxation, safeguards for small investors, regulation of digital assets, and rights to digital property connected to smart contracts and tokenization. The CBR declared that it firmly supports the "further development of digital technologies" so long as they don't expose customers to "uncontrollable" hazards regarding their finances or cybersecurity.
According to CBR, the same regulatory guidelines that apply to the issue and circulation of conventional financial instruments should also apply to digital assets, even though blockchain technology is still in its infancy. According to the CBR, short-term regulation should concentrate on safeguarding investor rights, tightening the requirements for putting digital assets into circulation, ensuring the issuer is accredited and providing all pertinent information to investors.
What the future will hold
Although a legal foundation for digital assets has been established, the Central Bank stated in a Telegram message that better regulation is necessary for the industry's future development. Russia has established the required legal framework for the digital asset issue and circulation. However, the market is still in its early stages of growth and is significantly less developed than the market for conventional financial products. Improved regulation is necessary for its further development. The central bank noted that there was already a legal framework for regulating smart contracts. Still, it suggests that any smart contracts developed in Russia be subject to an independent audit before being used.
Regarding the possibilities of tokenized off-chain assets, CBR was equally optimistic. The bank stated that laws would need to be put in place to secure a "legal relationship" between the token holder and the token itself.
The news comes as the Russian Ministry of Finance just authorized Russian citizens to utilize cryptocurrencies as a means of cross-border payment on September 22. However, neither the 33-page CBR study nor the Russia-Ukraine War that is presently raging in Ukraine mentioned the increased sanctions placed on Russia or the damaging impact they have had on its economy.