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Admission to trading and sale of instruments linked to cryptocurrencies and cryptoassets: regulator’s position

22 July 2021

The Bank of Russia recommends that Russian exchanges not admit for trading Russian and foreign securities where payments depend on exchange rates of cryptocurrencies, prices for foreign digital financial assets, dynamics of indexes of cryptocurrencies and cryptoassets, as well as prices of cryptoderivatives and securities of cryptocurrency funds. This follows from the Bank of Russia’s information letter.

Management companies should not include such assets in unit investment funds, while brokers and trust managers are advised to refrain from offering pseudo-derivative financial instruments with such underlying assets to non-qualified investors.

Cryptocurrencies and digital assets are characterised by high volatility, non-transparent pricing, low liquidity, technological, regulatory and other specific risks. Purchasing financial instruments linked to them entails increased risks of losses for people who lack sufficient experience and knowledge. The recommendations of the Bank of Russia are a preventive measure — they are aimed at preventing offering such instruments to common investors.

These restrictions do not apply to digital national currencies in the case of their release into circulation. They also do not apply to digital financial assets issued under Russian law in information systems whose operators are included in the register of the Bank of Russia.

Preview photo: wavebreakmedia / Shutterstock / Fotodom