Russia is Banning the circulation and issuing of Cryptocurrencies
Moscow March 16, Interfax interview with Alexei Guznov Director of Legal Department of the Russian Bank
What are the new conditions and requirements in the CFA bill, as well as other important bills for the central bank?
Amendments for the second reading of the Digital Financial Assets Act have been under preparation for more than a year.
“The draft law adopted at first reading in 2018 was more likely to focus on the definition of digital assets, with almost no rules on their distribution.
By autumn 2019 we have done work to improve the text of the project. And then the main question arose whether it was necessary to include a digital menu in the regulation circuit. This has become a stumbling block.”
What is in the current bill?
- First point, what are digital financial assets
- The second major problem to be solved was to define what constitutes a distributed register in which digital financial assets are accessible and recorded. The distributed register is an independent original information system.
- The bill also defines the basic infrastructure for organizing the issuing and circulation of digital financial assets, information system operators and exchange rate operators and what requirements are imposed on these institutions and their managers.
What we emphasize is that any digital financial asset exchange operator, must be able to truly develop and maintain an information system infrastructure that generates digital financial assets.
Such an operator must have a strong financial background and the net asset size must not be less than 50 million rubles.
Legalization of Cryptocurrencies and and attitude of Central Bank
The central bank does not change its attitude and is still negative.
Alexei says: “We believe that there are great risks to the legalization of the circulation of cryptocurrencies in terms of financial stability and the anti-money laundering system, as well as the protection of consumer rights. Therefore, during the discussion of the bill, we objected to the fact that this “instrument” was legalized.”
Other suggestions were also made.
“They may be that no one forbids to own a digital currency. This is somewhat absurd and generally not a reason, they are still not drugs or weapons.
However, from the point of view of the functioning of the financial and consumer protection systems, legalization is a problem and, most importantly, the organization of the circulation of cryptocurrencies.
The bill therefore directly lays down the prohibition on this matter as well as the organization of the circulation of the cryptocurrency and introduces liability for breach of this prohibition.“ said Alexei