Bank of Russia Tests Services associated with Cryptocurrencies
Russia’s financial institution has examined three platforms offering crypto-related services. The projects are tested in its regulatory sandbox within the course of 2020. Bank of Russia has received dozens of requests to pilot various financial services since it created the closed regulatory environment around three years ago.
CBR Pilots 3 Crypto Projects in 2020
The financial institution of the Russia (CBR), also referred to as Bank of Russia, launched the sandbox back in 2018, when developments in financial technology and decentralized digital assets presented regulators with a replacement set of challenges. Since the beginning of the initiative, over 70 entities, including financial institutions and fintech companies, have asked the regulator to check their new products, services, technologies, and business models.
CBR’s 2020 annual report published recently reveals that the bank admitted three crypto platforms to the sandbox last year. Centrobank reviewed the operation of a cryptocurrency mining pool, a crypto payment system and a digital assets investment platform, RBC reported. No details are provided regarding the present results from the testing but just in case of a positive outcome, the Bank of Russia is predicted to present a road map for his or her integration within the legal framework governing Russia’s financial sector.
Bank of Russia Provides ‘Safe Space’ for Crypto Projects
In July, the Russian parliament adopted a federal law providing for the establishment of special legal regimes for the testing of digital innovations, including within the financial industry. The financial institution uses its regulatory “safe space” to look at the potential effects of such projects in an isolated environment and identify risks related to innovative financial services and technologies. The CBR also can define the steps that require to be taken so as to make conditions for his or her implementation within the market.
Bank of Russia has within the past opposed the legalization of cryptocurrencies within the country but offered to allow crypto mining, as long as miners sell their coins outside Russian borders. With the Law on Digital Financial Assets coming into force in January, digital coins are now recognized and controlled as property.
However, Russians cannot use cryptocurrencies for payments, officialdom aren't allowed to have crypto, and investments are capped for ordinary citizens. Earlier this year, an annual limit of 600,000 rubles (around $8,000) was introduced for crypto investments by “non-qualified” participants within the market.
The financial institution is currently performing on a digital ruble project and is predicted to present the primary prototype of the CBDC platform by the top of this year. If everything goes consistent with its initial plan, the testing phase should begin in 2022. Last summer, CBR presented an updated concept of the digital ruble, following consultations with Russian financial institutions aimed toward creating a digital currency that’s more convenient for the banking sector.
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