The Russian central bank wants to make it illegal for mutual funds to buy crypto assets or related financial instruments. The proposal comes after the regulator urged stock exchanges to avoid trading securities tied to cryptocurrencies, which is in line with its hardline stance on decentralized digital money.
The Russian Central Bank has issued a draft directive prohibiting mutual funds from investing in cryptocurrency
The Russian Federation’s Central Bank (CBR) is preventing mutual investment funds from investing in digital currencies like bitcoin. The restrictions would also apply to derivatives, whose value is based on rate fluctuations or the prices of digital asset-linked securities.
According to the monetary authority, the move was justified by the need to protect investors’ funds and rights. The rule applies to both non-qualified and accredited investors. It will be implemented beginning in 2016 through amendments to the CBR directive “On the composition and structure of assets of joint-stock investment funds and mutual investment funds.”
The changes were recently published for public comment by the Bank of Russia. The deadline for providing feedback and proposals on the draft document is December 27. The new provisions were put forward by the regulator after asset managers were warned earlier this year not to include crypto assets in their mutual funds.
IN JULY, the CBR advised Russian stock exchanges to avoid listing cryptocurrencies-based instruments and advised brokers and trustees to avoid offering “pseudo-derivatives with such underlying assets to unqualified investors” in July. Later, the authority stated that it would not allow such investors access to cryptocurrency and that it would not provide related financial services.
However, according to poll results released this month, alternative assets such as cryptocurrencies account for more than half of non-qualified investors’ portfolios in the country. At the time, 46% of the 1,000 people who took part in the survey said they were considering digital currencies as a future hedge investment.
According to media reports citing Anatoly Aksakov, the influential Financial Market Committee head, lawmakers in Russia’s State Duma, the lower house of parliament, plan to consider restrictions on crypto purchases for private investors. Moscow officials have been debating the idea for some time.
In October 2020, the Bank of Russia proposed a 600,000 ruble ($8,000) annual limit and a public consultation on the threshold. The limit was expected to be incorporated into the law “On Digital Financial Assets,” which went into effect in January, but this did not happen.
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