Bank of Russia's Cryptocurrency Trading Initiative

The Bank of Russia is poised to initiate cryptocurrency trading as part of a controlled three-year experimental legal framework (ELR).

Access to this trading environment will be exclusive, limited to a selected group of investors, as noted in a recent statement from the central bank.

A Significant Step in Cryptocurrency Regulation

The central bank's plan involves establishing a three-year ELR specifically designed for crypto trading.

This strategy will facilitate transactions within a regulated context, emphasizing stringent rules and guidelines. The objective is to scrutinize market dynamics while ensuring compliance and oversight.

However, only a new category of 'highly qualified' investors will be granted access. To qualify, individuals must have made investments surpassing 100 million rubles in securities or deposits or achieved earnings exceeding 50 million rubles within the last year.

Additionally, companies recognized as qualified investors under current regulations will also be eligible for participation.

Financial institutions seeking to engage with cryptocurrencies will face specific regulatory requirements reflective of the associated risks.

“The introduction of the ELR aims to increase transparency in the cryptocurrency market, establish service standards, and expand investment opportunities for experienced investors willing to take on higher risks. The Bank of Russia has repeatedly stated that private cryptocurrencies are not issued or backed by any jurisdiction, rely on mathematical algorithms, and are highly volatile. Therefore, investors must understand the risks of potential financial losses before investing in cryptocurrencies,” the Bank of Russia’s statement reads.

In the past, Russian businesses have advocated for qualified investors to gain access to cryptocurrency trading platforms.

The primary aim of the ELR is to create a secure and regulated trading landscape for cryptocurrencies within Russia. Finance Minister Anton Siluanov has previously indicated two strategies under consideration—legalizing exchanges outright or allowing them under an experimental framework. Authorities opted for the latter to evaluate market operations before widening access.

Russians currently have the option to buy and hold cryptocurrencies, yet utilizing them for payments remains illegal. Without a national exchange, residents substantially depend on foreign platforms.

Facilitating Crypto Investments via Mutual Funds

In a parallel development, Andrey Bershadsky, CEO of asset management firm “Pervaya,” has suggested expanding access to cryptocurrencies through mutual funds.

Bershadsky advocates for professional asset managers to provide structured market access, which could mitigate investor risks.

“Providing market exposure through professional asset managers and collective investment instruments would be a major shift for our industry. New investors are entering this segment. However, they are forced to invest through platforms that are unregulated under Russian law and beyond the control of Russian regulators,” Bershadsky stated.

At this stage, only digital financial assets (DFA) will be included in certain categories of mutual funds. The central bank has been pursuing necessary regulatory adjustments since May of last year.