A paper has been published by the Central Bank of Russia (CBR), and its primary emphasis is on digital assets and how the country’s existing financial system may be adapted to accommodate the new technology.
On Monday, the Bank of Russia disseminated a public consultation report that was 32 pages long and titled ‘Digital Assets in the Russian Federation.’ The report made comparisons between this emerging technology and the conventional system, and it asked for feedback regarding how the former could be incorporated into the latter.
A discussion on distributed ledger technology (DLT) and the emergence of “new tools and services,” such as smart contracts, “digital (tokenized) assets,” central bank digital currencies (CBDCs), cryptocurrencies, and decentralized finance (DeFi) applications, is presented at the beginning of the paper (dapps).
It is important to note that all of them are distinct categories, and the majority of them are not included in this particular study. Tokenized financial instruments, collateralized stablecoins, and non-fungible tokens are all examples of digital assets, which are the primary area of concentration for the company (NFTs). It was said that cryptocurrencies and “unsecured (including algorithmic) stablecoins” are not considered to be a part of the “concept of digital finance.”
According to the research, even if these new technologies come with a considerable number of advantages,
“The market for digital assets is still in its early stages of development and has a very long way to go before it can compete with the market for traditional financial instruments in terms of volume.”
According to what was said by the bank, the primary objectives with regard to digital assets are regulation, financial stability, consumer protections, and compliance with the criteria for anti-money laundering and countering the financing of terrorism (AML/CFT).
The Bank of Russia “formulated and prioritized areas for further improvement” in relation to “digital rights” based on the outcomes of conversations it had had with players in the market, according to the statement. These are the following:
taxation of digital rights; circulation of digital rights through the infrastructure of conventional markets; questions about regulatory arbitrage between digital rights and traditional financial products; modifications to AML/CFT regulations
problems with the distribution of digital rights that have been granted in accordance with international law; regulations regarding the use of smart contracts.
In addition, the bank included a question about who should determine the appropriate standard terms of a smart contract as one of the twenty questions that were listed for consultation. The bank gave the following choices as to who should make this determination: market participants; the operator of the information system in which digital assets are issued; the Bank of Russia; or somebody else.
A question was also posed to the participants, inquiring as to whether or not they believe it should be possible to create obligatory disclosure requirements for digital rights issuers, as well as which types of organizations should be subject to legislation for mandatory disclosure.
Anatoly Aksakov, the Chairman of the State Duma’s committee on the financial markets, stated at the very end of October, as was reported, that a crypto mining regulation bill had been submitted to parliament – and that the bill would also allow Russians to use crypto “as a means of payment” outside of the country. The usage of cryptocurrency as a form of payment inside Moscow’s borders was previously prohibited.
Compiled by Coinbold