Bank of Russia Acts to Protect Crypto Companies Against Sanctions

The Central Bank of Russia has introduced a course of action aimed at protecting companies dealing with digital assets against the pressure of sanctions.

CBR Offers Relief to Crypto Companies, Albeit Temporary

The Central Bank of the Russian Federation (CBR) has introduced a set of measures to protect entities working with digital assets against pressures from sanctions. These measures allow the issuers of digital financial assets (DFAs) not to disclose sensitive information considering sanctions risks as reported by Bitcoin.com. Per these new measures, businesses will be exempted from certain reporting requirements, and they aim to provide some regulatory relief in an effort to minimize the burden on financial organizations. The exemption, which is valid until July 1, 2023, mainly concerns data revealing the beneficial owners of entities dealing with digital assets.  

Crippling Sanctions Have Forced the CBR’s Hand

The CBR issued a press release in which it explained that the temporary reporting exemption makes up part of a set of measures meant to provide assistance to organizations and persons operating within the Russian financial market infrastructure. Russia is yet to regulate cryptos such as Bitcoin, but the existing law “On Digital Financial Assets” allows firms to issue coins and tokens in controlled environments. As it stands, three “operators of information systems in which DFAs can be issued” have been licensed by the Central Bank – Russia’s largest bank, Sber, the tokenization service Atomyze, and Lighthouse. Sber recently announced that it is integrating support for MetaMask and Ethereum on its proprietary blockchain.

The CBR’s press release mainly focused on explaining the regulatory and supervisory relief it is offering to financial market participants and DFA issuers since earlier in the year is aimed at minimizing the burden on these entities given the current economic and geopolitical situation Russia finds itself in. The Russian government and many businesses have been suffering from harsh sanctions from the West over Moscow’s decision to invade neighboring Ukraine in February. The sanctions have been crippling and have severely restricted Russia’s access to global markets and finances.

Russia to Legalise Crypto Cross-Border Payments

Despite the Federation’s mostly anti-crypto stance, a proposal to legalise the use of cryptocurrencies for cross-border payments and international settlements in order to reduce the pressure of sanctions has been backed and advocated for by many Russian institutions, including the CBR – the institutional which has traditionally maintained a hardline stance on crypto regulations.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.