Russia’s central bank plans to ban mutual funds from purchasing crypto assets or financial instruments. This proposal is in keeping with the bank’s hardline stance on decentralized money. It comes after regulators urged stock exchanges not to trade securities linked to cryptocurrencies.
Central Bank of Russia issues draft directive banning crypto investments in mutual funds
The Central Bank of the Russian Federation (CBR), is taking measures to stop mutual investment funds from investing in digital currencies like bitcoin. These restrictions will also apply to derivatives, whose value is affected by fluctuations in rates or prices of securities linked to digital assets.
The move was explained by the monetary authority as a way to protect investors’ rights and funds. This measure applies to both accredited and non-qualified investors. It will be implemented through amendments to CBR directive “On composition and structure assets of joint stock investment funds and assets mutual investment funds” 2016.
The Bank of Russia recently published the modifications for discussion. The draft document’s revisions will be available for feedback and suggestions until December . After warning asset managers earlier in the year that crypto assets should not be included in mutual funds, the regulator has now proposed new provisions.
The CBR advised Russian stock markets to avoid listing instruments based upon cryptocurrencies in July. It also recommended that trustees and brokers refrain from offering “pseudo derivatives with such underlying assets” to unqualified investors. Later, the authority said it would not allow such investors access to cryptocurrency and denied the provision of financial services.
However, poll results this month show that cryptocurrencies make up more than half the portfolios of nonqualified investors in the country. 46% among the 1 ,000 survey respondents said that they consider digital currencies to be a future hedge investment.
According to media reports, Anatoly Aksakov (head of the Financial Market Committee), revealed that lawmakers in the State Duma, Russia’s lower house, are considering restrictions on crypto-purchases for private investors. Moscow officials have been discussing this idea for some time.
In October 2020, Bank of Russia proposed an annual limit of 600,000 rubles (a little over $8,000) and also sought public opinion on the threshold. The expectation was that the limit would be included in the law “On Digital Financial Assets,” which entered into effect January. However, that didn’t happen.
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