Russia's central bank has remained resistant to the integration of bitcoin and other digital currency trading into its markets, according to Forbes. The National Settlement Depository (NSD) of the Moscow Stock Exchange is currently preparing the infrastructure necessary to allow for digital currencies to be traded on the exchange at some point in the future, drawing attention to the contrast between the two positions. On Monday, the Bank of Russia indicated that cryptocurrencies and their derivatives should not be admitted for trading in Russian exchanges in the near future.
Concern Over Illegal Activities
The Bank of Russia's statement indicated that "cryptocurrencies are issued by an unlimited circle of anonymous entities. Due to the anonymous nature of the issuance of cryptocurrency, citizens and legal entities can be involved in illegal activities, including legalization (laundering) of proceeds from crime and financing of terrorism." This has long been a concern of governments and central banks when it comes to digital currencies. The statement continued, "given the high risks of circulation and use of cryptocurrency, the Bank of Russia considers it premature to admit cryptocurrencies, as well as any financial instruments nominated or associated with cryptocurrencies, to circulation and use at organized trades and in clearing and settlement infrastructure."
Future of Russian Cryptocurrencies Unclear
Perhaps somewhat paradoxically, given the Bank of Russia's resistance, the country on the whole has been highly active in the growing cryptocurrency space. Russian businesses have proven to be leaders in adopting digital currencies for use in the brick-and-mortar world, and earlier news from the NSD may have suggested that Russia would also lead the way in integrating cryptocurrencies into mainstream investment practices. For the time being, though, the Russian parliament will continue to debate how the country will regulate cryptocurrencies. A draft law is expected to pass this fall. Presidential press secretary Dmitry Peskov indicated to Tass newswire that legality of the industry is the jurisdiction of the government, saying that "these topics are subject to interdepartmental discussion; this is a new phenomenon in our life."
For its part, the Moscow Stock Exchange is developing a blockchain platform to allow for deposit and settlement services for a variety of digital assets. The platform is being built in partnership with Waves, a public blockchain project with Russian roots. Should this project come to fruition, the Exchange would be able to issue its own digital currency and wallet to be used by banks, pension funds, retail investors, and others. The Exchange has proposed a launch date for early 2018, although shifting rules and regulations could certainly impact that proposed start time. The NSD's executive board chairman Eddie Astanin suggested that "the platform will not only provide technological and legal protection of all parties involved, but will increase the variety of post-trade services for investors."