The Russian government has come out clearly with its stand on cryptocurrency regulations. The authorities clarified that they would not allow cryptocurrencies to be used for lending activities. They added that crypto will also not be allowed for use as collateral.
This was highlighted in a note that Russia’s finance ministry authored on the subject. Later, the note was approved by the federal government. The measures proposed in the note and approved by the federal government will underpin the regulatory framework for cryptocurrencies in Russia.
The regulations also envisage stricter control on advertisements and promotions of cryptocurrencies. The regulations stipulate that crypto entities will need to apprise prospective investors of the risks associated with investing in cryptocurrencies.
The finance ministry, in its note, has also suggested that the numbers of cryptocurrencies available for investments will also be limited by the government. This, ostensibly, is to protect the interests of the investors.
The finance ministry, in the note, has explained the rationale for the regulations to limit the number of crypto assets. The ministry feels that the crypto exchanges based overseas, do not do enough due diligence on the crypto projects listing on the exchanges. This opens up investors to the possibility of fraud.
It is felt that limiting crypto assets only to the most mature ones, will protect the interests of the investors. The ministry also said that it will permit even non-residents to purchase crypto assets on domestic and foreign exchanges as long they have offices in Russia. There is however a caveat – funds can be withdrawn from the platforms only through authorized Russian banks.
The finance ministry and the Russian central bank are now working on drafting a law to regulate crypto assets. The law is expected to be tabled in the lower house of the parliament during the spring session to be passed as legislation.