The Bank of Russia appealed to all participants in the securities market with a request not to trade derivatives; the value of which is directly or indirectly influenced by cryptocurrency rates.
In an official information letter, the central bank advised stock exchanges to reject bids from national or foreign issuers of products that rely on digital currencies, tokens, associated indices, rights, contracts or debentures. The Central Bank also asks not to place shares of companies working with cryptocurrency, its derivatives or crypto funds.
Companies advised to exclude all such products from mutual funds and not offer them to their clients.
According to the regulator, such a preventive measure is necessary to prevent these instruments from entering the mass market. In the Central Bank, this ban associated with the fact that cryptocurrencies and digital assets characterized by high volatility and non-transparency of pricing.
Brokers generally supported the recommendations of the Bank of Russia. “They dictated by the tasks of protecting the interests of unqualified investors and are generally quite justified. Cryptocurrency prices characterized by increased volatilit. Therefore, for inexperienced investors, working with such instruments carries significant risks of losing a significant part of their investments”, experts say.
The new regulations of the regulator don’t apply to digital currencies of central banks. As well as digital assets allowed in the country.
The Bank of Russia believes that preventing the massive use of cryptocurrency-based instruments will help protect the interests of market participants. And maintain confidence in the country’s financial market.
The Central Bank is studying the risks of investing in cryptocurrency
Recall that representatives of the Russian central bank often speak of cryptocurrencies as high-risk assets. The Central Bank intends to analyze the risks associated with digital currencies.
At the end of June, the Central Bank announced plans to study the risks of investing in cryptocurrency. The regulator planned to consider the systemic risks that Russian individuals and legal entities may be exposed to when investing in digital assets. The study involved 15 largest Russian banks, as well as electronic payment systems.
Also at the end of June, the head of the Bank of Russia Elvira Nabiullina recommended not investing in cryptocurrencies. In her opinion, speculative crypto assets are the most dangerous strategy. She noted that “the losses can be simply colossal”. “The central bank never gives advice on where to invest. But in this particular case, it is definitely not necessary here”, Nabiullina said at the time. A week earlier, Nabiullina said that the Central Bank considers cryptocurrencies a “monetary surrogate”. And opposes them being used for settlements in Russia.
In early June, the head of the Tinkoff group, Oliver Hughes, said that the company would like to give customers the opportunity to trade cryptocurrency. But the implementation of this service will take time due to the Central Bank. Hughes noted that including qualified investors who “know what they are doing” want to invest in cryptocurrency. But due to the “very tough” position of the Central Bank, Tinkoff Bank “doesn’t have a mechanism to provide investors with this product”.
Moreover, in Russia, the use of cryptocurrency to pay for goods is prohibited by law, however, cryptocurrency can be purchased if it was released on foreign platforms.