National Financial Stability Board meeting
The Bank of Russia played host to a meeting of the National Financial Stability Board. The meeting agenda included, among others, the following two items: (1) the application of distributed ledger technology by financial market players; and (2) the circulation of cryptocurrencies in Russia. The meeting participants reconfirmed their position that decisions on these two issues be made following a separate review.
Blockchain itself and the potential creation of a national digital currency are promising technologies; these should be investigated with a view to identifying the fields of their application from the standpoint of cost-cutting and better transaction transparency. The Bank of Russia, in cooperation with all interested government institutions and market players, is currently exploring and testing possible distributed ledger technology usage scenarios.
Regarding the use of cryptocurrencies, in accordance with the current legislation, the ruble is the official monetary unit (currency) of the Russian Federation. No quasi-cash is allowed in the Russian Federation. However, private cryptocurrencies, operating outside the scope of regulation, are transnational and transboundary. One way or another, investors are involved in their circulation and generation (mining) as they expect to profit from exchange rate differences in purchase and sale transactions. Private cryptocurrencies are neither issued nor guaranteed by any jurisdiction; based on mathematical algorithms, they operate within a decentralised network. Therefore, investors in any type of cryptocurrency should be aware that they assume all the risks of potentially losing their investment, and that no legal protection or government support of any kind will be available to them.
The meeting participants came to an understanding that joint efforts to explore the potential use of blockchain technology be continued, notably its possible benefits to both the national economy and the transparency of public services.
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22.09.2017 00.00.00