Fri. Aug 19th, 2022

The Central Bank of Russia (CBR) has released a framework for tokenization. However, it still considers cryptocurrency transactions as suspicious.

Tokenization of Assets Underway In Russia

The CBR announced in a press release on Monday, February 17, that it has successfully launched a platform that would enable people to tokenize assets. The assets that can be tokenized include shares and currencies. The central bank added that the tokens developed from the platform could be issued to investors.

CBR’s director of financial technology, Ivan Zimin, stated that the CBR had proposed the use of the platform to serve as a framework to guide Russia in its upcoming cryptocurrency regulation. The laws will serve as guidelines for how businesses will carry out the tokenization of their assets in the county.

Zimin stated that, “Based on the results of the piloting, the Bank of Russia proposed to include in the draft federal law “On Digital Financial Assets” the provisions necessary for the introduction and development of such decisions in the emerging digital assets market, which were supported by government bodies and businesses.”

It is still unclear how the proposal from the CBR will affect the general cryptocurrency sector in the country. However, the country’s apex bank has shown great disdain for cryptocurrency activities and is seeking to minimize the exposure of Russians to these digital assets.

CBR To Tag Cryptocurrency Transactions As Suspicious

The CBR is also looking to crackdown on cryptocurrency transactions in the country. According to a report from a Russian business news site, RBC, the central bank is planning to update its bank guidance on things considered as criminal activity. This would be the first time the CBR would be updating such guidelines in eight years.The CBR is set to tag the sale and purchase of cryptocurrencies as suspicious activities.

While the guideline is still in the works, the CBR will demand commercial banks to flag cryptocurrency activities and will give them the power to block such transactions. The commercial banks would even have the ability to close accounts involved in cryptocurrency transactions.

Some cryptocurrency industry figures have criticized the move. The CEO of technology and liquidity provider Broctagon, Don Guo, lamented against the move by the CBR. He pointed out that the two decisions by Russia’s apex bank will further create more uncertainties in the digital asset space in the country.

He added that Russia had taken a step forward and two steps backwards with these latest developments. The move would leave Russian traders in limbo as the country joins the likes of China and the US in offering conflicting advice on how to regulate cryptocurrencies.

Guo stated that while China has been advocating for Bitcoin and working on creating its central bank digital currency (CBDC), other countries like the US are fighting a losing battle to squash cryptocurrencies. He added that whether regulators like it not, the adoption of cryptocurrencies will continue. Any country dismissing cryptocurrencies at the moment will deal with the opportunity cost later, he concluded.

For the past three years now, the Russian government has been drafting a bill to regulate cryptocurrencies and other related activities. Officials in the country have noted that the law was nearing completion. However, Binance CEO,Changpeng Zhao, revealed in October last year that the Russian authorities were yet to make up their minds.