Despite its often-stated reservations about cryptocurrencies, the Bank of Russia has made legislative proposals to allow a three year experimental regime for crypto investment by wealthy individuals. It said it was at the behest of the President, but the bank nonetheless reiterated caveats about the risk involved.
The experiment would apply to wealthy individuals with assets of more than Ruble 100 million ($1.1m) or annual income of more than Ruble 500 million ($574,000) as well as companies that are qualified investors. The central bank plans to provide additional rules for financial institutions to ensure they manage the risks appropriately.
Apart from allowing wealthy individuals to invest, a key goal is to bring cryptocurrency trading out of the shadows and to help to develop standards for providing services.
Beyond the experiments, qualified investors will be able to invest in other assets linked to the performance of crypto, including derivatives, securities and so-called digital financial assets, which is the Russian legal framework for tokenized assets and digital securities.
Russia’s crypto experimental regime for trade
Meanwhile, last year Russia passed laws supporting the use of cryptocurrencies for cross border payments as one of many workarounds for sanctions. This is a different crypto experimental regime.
Subsequently, there were plans to create two exchanges where importers and exporters could use the Russian card payment system to exchange rubles for crypto. The central bank could monitor the process through the use of the card system.
However, whenever a new sanctions workaround is discussed, additional sanctions are imposed on the entity involved, or the crypto exchanges in this case. We’d observe that creating an experimental regime for domestic use cases makes it less obvious what’s happening.
