Share this article

Bank of Russia Tells Stock Exchanges to Avoid Crypto-Related Funds

The central bank doesn't want crypto ETFs on the country's capital markets.

jwp-player-placeholder

Stock exchanges in Russia shouldn't list investment products related to cryptocurrency prices, the country's central bank, which regulates the industry, said in an announcement on Thursday.

STORY CONTINUES BELOW
Don't miss another story.Subscribe to the State of Crypto Newsletter today. See all newsletters

According to a notice and explanatory letter published by the Bank of Russia, stock exchange operators should avoid listing any securities, such as exchange-traded funds, that provide payments based on the prices of cryptocurrencies, digital assets issued abroad, cryptocurrency price indexes, crypto derivatives and securities issued by cryptocurrency-related funds.

Asset managers should also exclude such securities from mutual fund portfolios, and brokers should not offer such securities to nonqualified investors.

The bank's Securities Market and Commodity Market Department is the regulator for Russia's equity markets. The ruling is designed to prevent retail investors from getting access to products they may not understand.

"Cryptocurrencies and digital assets are characterized by high volatility, low transparency of pricing mechanisms, low liquidity, technological, regulatory and other specific risks," the bank wrote. "Purchase of investment products tied to them exposes people who lack experience and professional knowledge to a high risk of losing money."

The ban doesn't include central bank digital currencies that might be issued or digital assets issued in accordance with the Russian law and registered with the Bank of Russia, the regulator added.

Russia passed a law regulating digital assets in June 2020. Earlier this year, more regulations were added prohibiting Russian public officials from owning crypto and obliging election candidates to report their crypto holdings. Meantime, bitcoin has been actively used for fundraising by Russia’s civil and political activists and independent journalists.

Read also: Russian Activists Use Bitcoin, and the Kremlin Doesn’t Like It

Anna Baydakova

Anna writes about blockchain projects and regulation with a special focus on Eastern Europe and Russia. She is especially excited about stories on privacy, cybercrime, sanctions policies and censorship resistance of decentralized technologies.
She graduated from the Saint Petersburg State University and the Higher School of Economics in Russia and got her Master's degree at Columbia Journalism School in New York City.
She joined CoinDesk after years of writing for various Russian media, including the leading political outlet Novaya Gazeta.
Anna owns BTC and an NFT of sentimental value.

CoinDesk News Image

More For You

Crypto Industry Asks President Trump to Stop JPMorgan’s 'Punitive Tax' on Data Access

JPMorgan CEO Jamie Dimon

A coalition of fintech and crypto trade groups is urging the White House to defend open banking and stop JPMorgan from charging fees to access customer data.

What to know:

  • Ten major fintech and crypto trade associations have urged President Trump to stop big banks from imposing fees that could hinder innovation and competition.
  • JPMorgan's plan to charge for access to consumer banking data may debank millions and threaten the adoption of stablecoins and self-custody wallets.
  • The CFPB's open banking rule, which mandates free consumer access to bank data, is under threat as banks have sued to block it, and the CFPB has requested its vacatur.
(
)