Cryptocurrencies remained among the burning topics during the Russia–Ukraine war. It had played a role from both the sides where war affected Ukraine received funds and aid from all over the world in crypto while Russia reported to use it to evade the sanctions. Many payment platforms either shut down or restricted their operations in Russia and some even seized Russian accounts in compliance to the sanctions.
Majority of authorities and countries were not in favor of crypto assets and the Central Bank of Russia (CBR) is one among them. On several instances earlier, it even went on to ask for a blanket ban on use of crypto within the country. However, this was a long time ago as the institution is looking towards crypto and blockchain as potential financial tools.
On 7th November 2022, the Russian central bank shared a report through a Telegram post for public consultation. The report noted methods which the bank is looking up to leverage blockchain tech and crypto to alleviate its global financial sanctions heavily affected the financial system.
The bank acknowledged the impact of sanctions might result in exposure of foreign crypto assets issuers to the Russian domestic market.
Furthermore, the report also shed light on the issue related to crypto regulation, protection of retail investors, smart contracts and tokenization related digital property rights along with the proposals of reformed accounting and taxation. The bank stated about the support to development of emerging digital technologies as they eliminate uncontrollable financial and cybersecurity risks for consumers.
According to the Central Bank, similar regulatory rules related from issuing to circulation of assets within traditional finance are to apply on digital assets as well, despite the technology being in its early stages. It added for the short term the regulations would need to be focused on protecting the investor rights, to make stringent rules for bringing any crypto into circulation, scrutinize the issuer and also ensure it provides all the crucial information.
In its message, the bank also noted that until the crypto assets legal framework comes into action, improved regulation is crucial for crypto space development.
While highlighting the regulations around crypto innovations like smart contracts, the Russian bank ensures a legislative framework to be in effect already. It also added the smart contracts created in Russia could be audited independently.
About tokenized off-chain assets, the central bank is quite optimistic, putting concerns to place regulations ensuring a legal connection to stay between crypto assets and its holder.
Source: https://www.thecoinrepublic.com/2022/11/08/sanctions-on-russia-opened-domestic-markets-for-foreign-crypto-issuers-report/