Several counties across the world have entered the blockchain industry, with applications being quickly identified. Governments have also recognized that the adoption of new technology is a way to expand the current financial structure. Some countries, however, had different opinions, and Russia was one of them. Just recently, the Director of the Central Bank Department stated that they were opposed to institutions organizing the development of cryptocurrency in Russia.
Alexei Guznov, Director of the Legal Department of the Bank of Russia, recently spoke about the crypto discussion of Russian authorities. It also disclosed information on the new terms and requirements set out in the draft CFA bill. The CFA bill is being re-presented in the Kremlin, and Guznov was asked about the preparations for the second reading.
The amendments for the bill have been in the works for more than a year no and many proponents were waiting for it with bated breath. Here the Russian government also plans to understand the differences between certified securities and digital financial assets.
Speaking to Interfax, Guznov stated:
“The bill, adopted in the first reading in 2018, was oriented, rather, to the definition of digital assets, it almost did not contain the rules for their circulation. We did the work to refine the text of the project by the fall of 2019. And the main question that arose then is whether it is necessary to include digital currency in the regulatory circuit. This has become a stumbling block.”
Russia has stated that it does not want to mix crypto with other regulated assets. At present, the bill simply defines what digital financial assets are while constructing a watershed so that securities and non-cash funds do not mix. Another advantage of the bill was that it provides a basic infrastructure for organizing the issuance and circulation of virtual assets.
Although the cryptocurrency climate was improving in Russia, users still needed to be careful about the jurisdiction. According to Guznov, the ministry was against institutions that can organize the release of cryptocurrencies. The Director of the Central Bank was careful to mention that they could not completely govern the crypto assets held by somebody in the country.
The bill will ensure users adhere to the rules of the IFRS. The IFRS regulations will always have to be held up but reports claimed that a mechanism was being created where a person could present their objections too. Russia was in the throes of several financial changes and it seemed that its tussle with crypto was never-ending.
This February, the Bank of Russia had issued a new set of rules for suspicious transactions and illegal funds. With these laws, any crypto-related transaction was categorized as a potential ‘money laundering’ risk. While Russia has been banning the use of external cryptocurrencies, reports have shown that the state-backed crypto was in the works. No detailed plans have come out yet but proponents are waiting to watch what the Kremlin does with blockchain and crypto.