Russia's Central Bank will integrate cryptocurrencies into its financial system

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Russia's Central Bank will integrate cryptocurrencies into its financial system

Amid a flurry of global financial sanctions, the Central Bank of Russia (CBR) is looking for ways to integrate crypto assets and blockchain. Blockchain technology has been integrated into Russian traditional financial systems in a report released by the central bank of the country.

A public consultation report on "Digital Assets in the Russian Federation" was shared by the bank. It discusses how sanctions-affected countries can open their domestic markets to foreign issuers of digital assets, especially those from "friendly countries."

Moreover, the report provides recommendations for reformed accounting and taxation as well as regulation of digital assets and protection of retail investors. As long as consumers are not subjected to "unmanageable" financial or cyber security risks, the CBR strongly supports the development of digital technologies.

The CBR emphasizes that despite the emergence of blockchain technology, digital assets should be subject to the same regulatory rules as traditional financial instruments.

Integration of crypto assets and blockchain technology

“Russia has created the necessary legal framework for the issuance and circulation of digital assets [...] But so far the market is at the initial stage of its development [...] and is many times inferior to the market of traditional financial instruments.

Its further development requires improved regulation”. , is the message of the Central Bank. Smart contracts are already regulated, but the central bank suggested that they should be independently reviewed before they are implemented in Russia, even though the regulatory framework already exists.

Off-chain tokenized assets were also deemed to have positive potential by the Russian central bank. To ensure a "legal connection" between token holders and tokens, the bank noted that laws will be required. Russia's economy has been battered by increased sanctions imposed over the past few months, however, and the Russian-Ukrainian war raging in Ukraine is not mentioned in the bank's 33-page report. The bank announced in August 2022 that it would introduce the digital ruble to all Russian banks by 2024.