Bank of Russia Sees No Place for Crypto in Financial Market, Finalizes Digital Ruble Prototype

The Central Bank of Russia (CBR), which is well-known for its hardline approach to the issue of legalizing cryptocurrency, is currently preparing a report. It will present its views on the matter in depth. In comments to Russian media, Vladimir Chistyukhin, Deputy Chairman of the Central Bank of Russia (CBR), stated that the regulator plans to push for legislative changes to regulate digital asset circulation.

“I believe that we will solve the issue through amends to the legislation. Chistyukhin spoke to reporters at the State Duma (the lower house of parliament), and stated that there will be a clearer definition of cryptocurrency trading.

Official noted that Russian citizens and companies have the right to buy and hold cryptocurrency. However, they cannot do so through the country’s financial infrastructure or intermediaries. The official made this comment in response to a question about whether the CBR supports banning crypto-exchange transfers from Russian accounts.

The working group for crypto regulation will meet at the Duma in its first meeting. It will begin with a review CBR reports, as Anatoly Aksakov (head of the parliamentary Financial Market Committee) announced in November. Chistyukhin commented on the contents and said:

Let me give you a hint: We don’t see cryptocurrency as a viable option in the Russian financial markets.

Sources cited by Reuters indicate that the regulator is looking into imposing a ban on Russian cryptocurrency purchases. At a press conference held Friday, Elvira Nabiullina, Chair of CBR, reiterated her bank’s suspicions about cryptocurrencies. also stressed that Russia should not be used for crypto transactions.

Russia’s Central Bank is Ready with a Digital Ruble Prototype

While clarifying its position on cryptocurrency, the CBR is currently working to create a Russian central bank digital money ( CBDC). This week, Olga Skorobogatova, First Deputy Chair, told journalists that the prototype of the digital ruble platform was complete. Interfax reported that she said that the authority will begin piloting operations using the currency after January’s holidays.

Twelve Russian banks will take part in the first stage of the trials, which will continue through 2022. Bank of Russia stated earlier in December that it will invite credit organisations and conduct consumer-to-consumer transactions during the first stage. At the second stage, transactions between corporate entities and private individuals will be tested, the Federal Treasury will join along with financial intermediaries.

CBR started to consider a digital version the Russian ruble three year ago. The regulator then decided to examine the possibility of issuing a CBDC last. In October 2020, the regulator published a consultation paper and received feedback from financial sector actors. The bank published a digital ruble model in April 2021. The bank will permit non-residents to open digital ruble wallets and use the currency to convert to foreign fiat.

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