Publication of draft laws on digital assets and crowdfunding

As commissioned by the President of the RF (Order No. Pr-2132, dated 21 October 2017) and First Deputy Prime Minister of the RF (Order No. ISh-P13-7578, dated 14 November 2017), the Bank of Russia is publishing draft laws ‘On Digital Financial Assets’ and ‘On Alternative Ways to Attract Investment (Crowdfunding)’.

The draft law ‘On Digital Financial Assets’ was prepared by a working group which consisted of representatives from the Bank of Russia and the Ministry of Finance. The draft law’s provisions have been generally agreed upon, with the exception of the possibility of exchanging cryptocurrency for rubles, foreign currency and/or other assets on the trading floor of a digital assets operator. The most sought-after service among other ICO services is investment attraction by way of token issue. In view of this, the Bank of Russia speaks in favour of exchanging tokens for rubles, foreign currency and/or other assets on the exchange floor of an authorised operator solely with regard to tokens issued as part of an ICO for attracting investments in Russia.

However the circulation of unsecured cryptocurrency, which is not guaranteed by any state, is highly risky both for consumers and investors.

Transactions involving cryptocurrency are prone to the risks of laundering of criminally obtained incomes, as, even though the ultimate party is identified, it does not seem possible to trace and identify the whole chain of cryptocurrency creation, circulation prior to its exchange. The Bank of Russia believes that merely giving permission to the ultimate beneficiary to conduct exchange operations with cryptocurrencies will legalise, among other things, previously committed suspicious transactions. This may create new possibilities for unfair players and pose considerable risks to the financial system’s stability.