Značka: Bank of Russia

Central bank overkill: Russia’s proposed crypto ban and why everyone’s against it

On Jan. 20, the Central Bank of Russia (CBR) issued a report summarizing its position on digital assets and proposing a ban on any crypto trading and mining operations in the country. Although the CBR’s strict position on the matter was never a secret, such a bold statement triggered waves of fear, uncertainty, and doubt — otherwise known as FUD — across the board, given Russians’ high rates of involvement in the global digital assets market. Yet, there are reasons to doubt the ultimate effectiveness of the CBR’s hardline bidding, both in terms of its enforceability and its acceptance by other power centers, including legislators and siloviki (securocrats). The picture gets even more complicated for the central bank, as a high-ranking official within another major center of economic policy, the Ministry of Finance, spoke in favor of regulating, rather than banning, crypto earlier this week. What are the chances that the hardline approach will prevail?What does the CBR intend to ban?Using an assortment of standard crypto-phobic arguments, such as comparing digital assets to a Ponzi scheme, the central bank’s “Cryptocurrencies: Trends, risks, measures” report calls for a complete domestic ban on over-the-counter trading desks and crypto exchanges alongside mining. Notably, the emphasis is on using the legacy financial infrastructure: The CBR addresses its document to private banks and institutional investors, discouraging them from any involvement in digital assets.In its current version, the proposed ban would not outlaw the possession of digital assets by individual investors, nor would it ban exchanging them using international rails. Still, the regulator wants to introduce some fiscal transparency and make sure that private investors won’t escape their tax burden. Nonfungible tokens (NFTs) would also likely remain outside of the scope of the ban.Possible effects on crypto operations Many domestic stakeholders don’t believe in the effectiveness of the proposed restrictions. Speaking to local media, Maksim Malysh, CEO of mining platform Kryptex, explained that it is unlikely that the mining ban would result in a market breakdown, as the largest Russian-owned mining pools operate outside of Russia’s borders and are registered as foreign companies. Exchanges, he maintained, would not find it difficult to create new mirror sites in the event domains are blocked. In Malysh’s opinion, “Any blockings would lead only to the rise of VPN services’ popularity.”Andrey Mihaylishin, co-founder of crypto payments system Joys, doubts that the measures proposed by the CBR would stop larger investors either — they could simply open accounts with Belorussian or Kazakh banks where crypto investments are legal.Since the report invites public input, there is hope that industry participants will be able to articulate compelling arguments against the ban. The biggest Russian mining pool, EMCD, plans to send its comments on the report to the central bank, sharing with the regulator its thoughts on the taxation, risk management and further institutionalization of mining. Among EMCD’s ideas are special energy tariffs for mining companies and tax deductions for those that operate in Russia’s economically depressed regions. At any rate, the report is not a legally binding document, unlike the federal law “On digital financial assets and digital currency” that was passed in 2020. The language of the law is vague and, for example, does not mention mining at all, though it still allows for “the issuance of digital financial assets.” The unlikely allies It came as no surprise that the vocally pro-liberty founder of Telegram, Pavel Durov, bashed the proposed ban, warning of its destructive potential for “the development of blockchain technologies in general” and “a number of sectors of a high-tech economy.” Much more unexpected, however, is the backlash against the CBR report among other government bodies and officials, which contradicts the simplified image of a monolithic Russian state machine.Andrey Lugovoy, deputy chairman of the Committee on National Security and Anti-Corruption of the State Duma — the lower chamber of the Russian parliament — publicly noted that it would be more reasonable to continue working on legalizing the industry rather than outlawing it. Lugovoy, who also was one of the initiators of a working group on the legalization of crypto mining, said:“When you make statements like this — ‘We strictly prohibit’ — you should ground your position in concrete, clear, apprehensible numbers and explain what you’re going to do with the people who already own cryptocurrency. […] Nobody knows why the CBR holds such a radical view. There is a single explanation — high volatility and ‘It’s a Ponzi scheme.’ But so what? We can name many examples of something risky that still plays a role in our daily lives.”In fact, the Duma has had a tense relationship with the central bank for quite some time. The legislature has been working on a crypto regulatory framework for several years, but these attempts have foundered due to the banking regulator’s unyielding position. A bill that would have clarified the taxation procedures around digital assets was reportedly blocked due to the CBR’s objections. Even the Federal Taxation Service, which is highly interested in citizens’ crypto yields, couldn’t change the situation. Related: Ban less likely? Putin says crypto mining has advantages in RussiaIn its report on the proposed ban, Bloomberg — citing anonymous sources — pointed to the lobbying influence of the Federal Security Service (FSB) as one of the factors driving the CBR’s initiative. Allegedly, the FSB is worried about crypto being used as a tool to finance the country’s opposition. Leonid Volkov, chief of staff for opposition leader Alexei Navalny, confirmed that this use case is accurate, also voicing his disbelief in the policy’s ultimate success.Bloomberg’s narrative, however, did not go uncontested. Lugovoy called it “a well-crafted fake with someone’s interest behind it,” claiming that he has never heard FSB representatives offering any position on crypto during parliamentary working groups’ meetings. According to Russian business publication The Bell, the CBR has been the only entity in the interagency working group on crypto to promote a “Chinese scenario” for digital asset regulation, with the FSB casting its voice against it. At this point, the working group has unanimously declined only two regulatory frameworks: the full legalization of crypto and the current one of non-intrusion.The Finance Ministry chimes in The story got a new twist on Jan. 25 when Ivan Chebeskov, head of the Department of Financial Policy within the Finance Ministry, stated that the Finance Ministry’s position is one of regulation, not prohibition, of digital assets. Moreover, he mentioned that the agency had already prepared its own regulatory framework and is currently waiting for the government’s feedback. As per Chebeskov’s statement:“The world has virtualized to a high degree, the technologies are advancing swiftly, and, I think, we can’t just take one of the high-tech industries and ban it in our country, letting it develop in some other place.”This wasn’t the first time the Ministry of Finance let the CBR know that it holds a different opinion on the matter. At a Duma meeting in December 2021, Deputy Minister of Finance Aleksey Moiseev proposed only limiting cryptocurrency purchases for unqualified investors. He added further that it was “too late” to ban cryptocurrencies, given that more than 10 million Russian citizens collectively hold around 5 trillion rubles ($63 billion) in crypto.This difference in opinion could weaken the central bank’s position even further, possibly granting some relief to the industry. With a wide range of opponents in both the legislative and executive branches of government and without outright support from security agencies, the CBR’s report looks like overkill.Historically, the CBR has enjoyed broad autonomy in economic-decision making under President Vladimir Putin’s rule, but it has been constrained by its specific mission: maintaining the economy by taming inflation, imposing austerity measures when needed and ensuring the stability of the national currency.The prerogative to issue prohibitions has always resided with other entities, be it the parliament or government. Thus, if the entire case for the ban is based solely on the CBR’s distrust of a volatile asset class and its unwillingness to craft complex regulation, chances are that last week’s report will remain no more than just one governmental body’s position paper on a hot issue.

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Russian finance ministry official calls for crypto regulation, not restriction

In surprising comments made by the Russian director for financial policy, Russia could be softening its stance toward crypto. Ivan Chebeskov, a director within the Ministry of Finance, has come out in support of regulating crypto rather than banning it.His support is a response to the Russian central bank proposing a blanket ban on crypto mining and trading.According to Chebeskov, banning cryptocurrency operations and mining will lead to the country lagging behind the worldwide tech industry. The minister instead suggested that cryptocurrencies should be regulated:​​“We need to give these technologies the opportunity to develop. In this regard, the Ministry of Finance is actively involved in the development of legislative initiatives in terms of regulating this market.”The comments were made during the RBC crypto conference, taking place on Tuesday. Chebeskov said that the Russian ministry has prepared a proposal for the regulation of digital assets and is waiting to hear the government’s position on the matter. Prior to working at the Kremlin, Chebeskov enjoyed a productive career employed at Russian and European investment banks. He was a student at the pro-Bitcoin state of Texas and has spoken out in favor of digital currencies in the past. In his view, a digital rouble could compete with the likes of China’s central bank digital currency (CBD. China’s central bank released a pilot version of a digital yuan wallet in early January. Elsewhere, the private sector was also quick to rebuke the proposal, which would ban the issuance, exchange and circulation of cryptocurrencies in Russia. Telegram CEO Pavel Durov, for example, wrote that the proposed ban on crypto would “destroy a number of sectors of the high-tech economy” in a post on his messaging application Telegram. Related: Vibe killers: Here are the countries that moved to outlaw crypto in the past yearIn Russia’s neighboring countries, anti-crypto sentiment is rife. Georgian citizens were made to swear an oath to stop mining crypto, whereas top Bitcoin (BTC) mining country Kazakhstan turned off the internet amid protests. In light of El Salvador’s recent state visit to Moscow, and pro-crypto proponents such as Chebeskov popping up in the Kremlin, Russia may surprise the crypto industry in 2022.

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Owner of Russian bank Tinkoff acquires Swiss digital asset firm

TCS Group, the owner of the major private Russian bank Tinkoff, is gaining exposure to digital assets.The firm has invested in Swiss digital asset service provider Aximetria, which is set to become the company’s first major crypto-related outfit, local news agency The Bell reported Wednesday.Citing data from Aximetria, the report suggests that TCS purchased 4,449 Aximetria shares worth 100 Swiss francs ($108) per share. Given that Aximetria’s total share capital was about 535,000 francs ($578,000), the publication reported TCS’ stake to be around 83.2%.A spokesperson for Tinkoff confirmed the news to Cointelegraph, stating that Aximetria will be “part of the international expansion of Tinkoff Group in compliance with all the requirements of the jurisdictions of international presence.”The representative emphasized that Aximetria is “not a crypto exchange” but rather a “financial service in the digital asset industry.”At the time of writing, Aximetria’s main page includes details on the firm being part of TCS. Aximetria lets users open a “Swiss crypto account” with free deposits and withdrawals in euros or U.S. dollars. The platform says it targets clients worldwide.Source: AximetriaAmid skyrocketing demand for crypto investments, Tinkoff has been struggling to offer crypto investment services in Russia as the Bank of Russia reportedly stopped the company from launching its own suite of related services. This led to a situation where Russia has no single legal company that is based in the country and offers crypto investment.The central bank is known for its hostility to the crypto industry and Bitcoin (BTC). However, it reportedly wants to allow people to invest in crypto investment using foreign platforms.Related: Russia’s largest bank struggles to register its digital asset platformDespite the ongoing harsh stance of local regulators, Russia’s largest bank, Sber, launched a crypto exchange-traded fund in December, tracking major crypto investment firms and exchanges like Coinbase and Galaxy Digital. Formerly known as Sberbank, the state-backed firm was previously planning to launch a crypto exchange business under its Sberbank Switzerland subsidiary back in 2018.

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Binance taps former central bank exec to push compliance in CIS and Russia

Binance, the world’s largest cryptocurrency exchange, is putting more effort into increasing compliance in the Commonwealth of Independent States (CIS), Russia and Ukraine.Binance is planning to extend its operations in the region and boost local cryptocurrency compliance and education, Gleb Kostarev, Binance’s head of operations for Russia and the CIS, told Cointelegraph on Tuesday. The company additionally expects to focus on the local Binance Smart Chain (BSC) development and community, he noted.As part of the effort, Binance announced several local hires, including Olga Goncharova, Binance’s new director of government relations in Russia and the CIS.Goncharova previously served at the Bank of Russia as director of the bank’s report processing department from 2014. She was responsible for processing financial statements from companies under the central bank’s supervision, also leading several Bank of Russia’s projects related to fintech and digital transformation.“Binance places a great emphasis on regulation and compliance in jurisdictions of operation. Binance’s unique community, cutting-edge technology and innovative approach to work give Binance great opportunities for further development,” Goncharova said.Vladimir Smerkis, co-founder of the cryptocurrency platform Tokenbox, has also joined Binance as director of Binance Russia. Other new regional hires include former BNP Paribas exec Kirill Khomyakov, who will act as general manager of Binance Ukraine.“With a proven track record, the new executives will certainly have a positive impact on Binance’s growing presence in Russia, Ukraine and Eastern Europe,” Kostarev said.Related: Bank of Russia to allow crypto investment via foreign firmsThe latest news marks a significant strategic move by Binance as the region has been increasingly emerging as one of the world’s biggest crypto spots and mining centers.Kazakhstan, a major CIS member state, is the second biggest Bitcoin (BTC) mining country after the United States, responsible for 18% of the total BTC mining hash rate as of October 2021. Going next to Kazakhstan, Russia produces 11% of the entire global BTC mining hash rate and is the third-largest visitor of Binance’s website, according to data from SimilarWeb.

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Russian bank Sber launches blockchain ETF tracking Coinbase, Galaxy Digital

Sber, the Russian government-backed company and the largest bank in the country, is launching a blockchain exchange-traded fund (ETF) to track the performance of major crypto companies such as Coinbase and Galaxy Digital.Sber Asset Management officially announced the news on Thursday, stating that the new ETF is linked to various blockchain and crypto industry firms, including hardware and software providers for mining and issuing crypto assets.Called “Sber — Blockchain Economy,” the fund is set to trade under the ticker SBBE and will track the eponymous index developed by Sber’s investment subsidiary SberCIB.SBBE’s portfolio will include some of the world’s biggest crypto companies, including the United States’ largest exchange Coinbase, Mike Novogratz’s investment company Galaxy Digital and blockchain software provider Digindex.According to the announcement, Sber’s blockchain ETF will be the “first ETF in Russia to allow investors to make money in the blockchain market without difficulties associated with direct development, buying, holding and selling digital currencies.”This story is developing and will be updated.

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Law Decoded: Making sense of mixed signals, Dec. 13–20

The crypto regulation regime in any jurisdiction is an equilibrium among multiple institutional, group and personal interests of actors who have a sway over financial and monetary policies. These interests never perfectly align, frequently resulting in contradictory signals coming out of various power centers. Speaking about systemic risks facing the world’s largest economy last week, the United States Federal Reserve chair said digital assets were not a financial stability concern. Two days later, the U.S. Financial Stability Oversight Council issued a report that concluded that stablecoins and decentralized finance could pose sizeable financial stability risks. The source of this discrepancy could lie in the fact that the Fed’s mandate is to maintain a robust economy, while the FSOC, which has roots in the Dodd-Frank reform, is explicitly tasked with spotting systemic risks. The shape of the hammer that each regulatory actor wields bears on how they see the digital asset nails, which holds true beyond the U.S. context.Below is the concise version of the latest “Law Decoded” newsletter. For the full breakdown of policy developments over the last week, register for the full newsletter below.From Russia with FUDRecent reports from Russia have stirred crypto investors’ fears that the hard line on digital assets, championed by the nation’s central bank, could be prevailing in the crypto regulation debate that had been simmering for years. The Bank of Russia opened last week with an announcement that mutual funds will be banned from investing in cryptocurrencies and crypto derivatives. Next came a series of the central bank governors’ critical remarks on crypto, furnished with an implication that the idea of a blanket ban was not off the table. Anxious traders sought relief in the statements by the chair of the Financial Markets Committee of the Russian parliament, Anatoly Aksakov. At a press conference, Aksakov noted that the intransigent path was not the only one that the Russian authorities are considering. The alternative is a scenario where exchanges are regulated and mining is taxed.U.S. partisan divideAnother forum where opposing opinions on digital asset-related matters clashed last week was the U.S. Senate Committee on Banking, Housing and Urban Affairs floor. A hearing on “Stablecoins: How do They Work, How Are They Used, and What Are Their Risks?” saw industry experts, academics and think tank analysts offer a range of viewpoints on dollar-pegged cryptos and their role in the financial system. Critics such as Senator Elizabeth Warren have continued telling their cautionary tales of stablecoin risks and dangers of the DeFi space. Meanwhile, allies such as Senator Pat Toomey highlighted aspects of the technology that promote financial inclusion and increased efficiency.Updates from U.S. watchdogsInterestingly, conflicting signals emanated even from the U.S. Securities and Exchange Commission last week. Commissioner Hester Peirce, widely known as Crypto Mom, publicly pushed back against SEC Chair Gary Gensler’s lack of focus on urgent digital asset-related matters. This internal row, however, changed little in the agency’s usual policy of delaying decisions on Bitcoin (BTC) exchange-traded funds (ETF). Two products sponsored by investment firms Bitwise and Grayscale were denied certainty for another few months. Finally, on the SEC, the regulator’s former head, Jay Clayton, came out of the woodwork to laud “cryptocurrency technology” and its efficiency advantages. Clayton is remembered for his reasonable stances on many crypto-related issues, although regulated Bitcoin ETFs remained out of reach during his tenure.

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Bank of Russia to ban mutual funds from investing in Bitcoin

The Russian central bank continues its strict policies regarding the cryptocurrency industry, now officially banning mutual funds from investing in cryptocurrencies like Bitcoin (BTC).On Dec. 13, the Bank of Russia published an official statement on regulating investment opportunities by mutual investment funds.Despite expanding the number of assets available for investment by mutual funds, the document prohibits fund managers from buying cryptocurrencies as well as “financial instruments whose value depends on prices of digital assets.”The statement emphasizes that mutual funds are not allowed to provide crypto exposure both to either qualified or unqualified investors.The Bank of Russia previously recommended asset managers to exclude cryptocurrencies from exposure in mutual funds in July 2021. According to a report by local news agency RBC, there have been no Russian mutual funds with crypto exposure despite there having been no formal ban until now.Artem Deev, head of the analytics department at the brokerage firm AMarkets, reportedly said that Russia has only one industry-related exchange-traded fund (ETF) so far. According to Deev, the fund is managed by the joint-stock management company “BrokerCreditService” and invests in companies focused on decentralized data storage and blockchain, including firms like Jack Dorsey’s Block, PayPal and Broadcom.Russia’s largest bank, Sber, is reportedly also planning to launch a blockchain-focused ETF, Sber’s asset management head Vasily Illarionov said. The ETF will be called “Blockchain Economy” and will invest in stocks related to blockchain adoption. Illarionov noted that the fund does not fall under the restrictions of the Bank of Russia and can be offered to retail investors.Related: Russia’s largest bank struggles to register its digital asset platformAs previously reported, the Bank of Russia has taken a hard stance on cryptocurrencies and has barred some big banks from offering crypto investment services. The regulator argued that such services do not “meet the interests of investors and bear great risks.”

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Russia prioritizes CBDC ruble as overall crypto outlook seems positive

After the Chinese authorities introduced a complete ban on cryptocurrency transactions in September by equating them to illegal financial activity, local cryptocurrency miners either dropped off the radar or moved to other countries in order to continue with their business.The United States subsequently became the leader in terms of Bitcoin (BTC) mining volumes with a share of 35.4%. Modest Kazakhstan is currently in second place (18.1%), and the bronze spot was secured by Russia (11.23%).It’s not surprising because Russia has several advantages, meaning that conducting crypto business in the country is extremely lucrative for almost any miner. There is cheap electricity and, at least for now, friendly legislative regulation. According to analysts in spring 2021, the price of electricity in Russia was $0.06 per kilowatt-hour for household use and $0.08 for business. To compare, in France, a kWh of electricity costs $0.2 for householders and $0.14 for business, which is four times more expensive than in Russia. Other estimates suggest that the difference in the cost of electricity when mining Bitcoin in Russia and Europe is actually closer to 7.5 times.Many private crypto farms and mining companies have emerged in the country. Of course, as in the rest of the world, many Russian miners did not survive the “crypto winter” in 2018, when Bitcoin’s price dropped to almost $3,500, making crypto mining unprofitable. But COVID-19 has forced many to look for additional income and search for alternative ways to replenish their capital.Favorable conditions for mining even contributed to the fact that state oil companies suggested crypto mining at their fields and using associated gas to generate electricity. By the way, Gazprom Neft, the largest gas supplier to European countries, launched a data center for mining at its facility in Siberia back in 2020.Vitaliy Borshenko, co-founder of industrial mining operator BitCluster, is sure that even with high power consumption, mining in Russia will find support not only from private companies but also from the authorities:“The Bitcoin mining industry is a unique purchaser of electricity. The uniqueness comes from the highly flexible nature of the sector in terms of payment method location indifference and electrical load distribution. Huge facilities are built in remote parts of the country, giving tax revenues to local budgets and jobs to local residents. And since there is no shortage in electricity, the authorities can only support this process.”Is crypto legal in Russia?Each state today regulates the crypto industry based on its own interests and in completely different ways. Some countries fully prohibit cryptocurrencies, while others have made steps to legalize them.There are already rules and regulations governing the circulation of cryptocurrencies in the Russian market. But as is the case with many other countries, there are problems with regulating cryptocurrencies since the industry is very young and not all the regulators are familiar with it.Like many countries, Russia followed the global trends, and in 2014, there were early signs of various proposals for bills to regulate the industry. The first distinct steps toward regulation began in 2018, and in 2019, the federal law “On Digital Rights” came into force, which provided the procedure and rules for using digital assets and tokens. A full-fledged law “On Digital Financial Assets” also began to be discussed. Finally, in January 2021, the still very “crude” and unfinished piece of legislation came into effect. This was the first law that aimed to specifically regulate cryptocurrencies and mining, as well as introduce taxation, but it still didn’t recognize cryptocurrencies as a means of payment. Russian banks and stock exchanges are able to conduct transactions of purchase, sale and exchange of assets if they are included in a special register of the central bank. Nevertheless, the state doesn’t have a mechanism to track profits derived from cryptocurrencies. When applying this law to ordinary users, a person who wants to store Bitcoin and doesn’t tell anyone about it, they can safely do it thanks to the network’s anonymity. Deanonymization occurs when cryptocurrencies get exchanged for rubles, dollars or any other fiat currencies, making it possible for the state to intervene in these transactions and create obstacles.In general, regulators in Russia cannot find a consensus, not only regarding the adoption of cryptocurrencies but how to even label and subsequently regulate them. Recently, the Russian Ministry of Economic Development proposed to understand mining as a business activity in accordance with the civil code. The proposal was supported by the Ministry of Finance, the Ministry of Energy and the lower house, the State Duma. The Ministry of Energy specified that consumers must indicate the level of power consumption for business or for personal spending. The State Duma also proposed to increase the electricity tariff for miners since they do not pay any taxes. But the Central Bank of Russia did not support this initiative and called mining a “monetary surrogate.” In September, the Central Bank suggested banks slow down payments of Russian users in crypto exchanges to combat “emotional purchases” of cryptocurrencies. For Valeriy Petrov, vice president of the Russian Association of Cryptoeconomics, Artificial Intelligence and Blockchain, this suggests that the Central Bank is stalling to make a decisive regulatory move despite the desire from the local industry to work with the regulators:“Regulation of mining is required only in two issues: recognition of its entrepreneurial activity and the legalization of the sale of earned crypto assets outside the Russian Federation in order to organize an inflow of foreign exchange funds into the country and determine the procedure for paying taxes to the state treasury. The crypto community has developed all the questions for a long time.”A digital rubleWhat if the Russian Central Bank does want to get involved in the young and uncontrolled financial sphere but only to become a monopolist and create its own cryptocurrency?Back in 2020, the Central Bank announced that it was studying the possibility of a digital ruble. The new currency would potentially be used both online and offline and would be stored in a special wallet. The regulator emphasized that its digital currency will be an equivalent form of the national currency. The digital ruble will become a project of a new payment infrastructure that will increase the availability and reduce the cost of payments and transfers for citizens and businesses. According to the Central Bank, in 10–30 years, the digital ruble should completely replace cash.This summer, the bank clarified that the development of a prototype of the platform for the digital ruble is planned to be completed in December 2021. Testing of the currency is planned for January 2022, which will take place in several stages throughout the year. After this test, the regulator will define a plan for its implementation.Related: Asian CBDC projects: What are they doing now?In addition to the usual means of payment, in the future, the digital ruble can be used to pay taxes, which can only be paid in a non-cash form in Russia.Since the Central Bank hasn’t yet disclosed all the details about the digital ruble, some financial organizations such as the Association of Banks of Russia have raised questions and suspicions. The critics cite the security of transactions. It isn’t yet clear how the regulator will ensure the safety of data in the digital ruble system and protect it from unauthorized access and data leaks.The Central Bank reports that settlements using the digital ruble will be reasonably safe and stable. In particular, through a hybrid of systems based on the principles of centralization and decentralization, data protection of the system must be ensured. The regulator has outlined plans to introduce multi level protection against unauthorized transactions and appeals against disputed transactions. Perhaps, a digital citizen profile, biometric data and other tools will be used.Security issues are not limited to questions about the digital ruble itself. Some see it as another instrument of monetary control over the population and business. The role of commercial banks in the digital ruble system is also questionable. With the growth of the circulation of the digital ruble, the volumes of their assets may decrease. Due to the fact that they will become intermediaries in the system, the role of their own products may be diminished. This can lead to a general drop in the stability of banks, which could harm the economy.Is Russia a threat to crypto?It is too early to speak about the consequences of the introduction of the digital ruble. The entral Bank has not yet disclosed all plans for a new payments instrument and details on its implementation. But if the system is launched successfully, then it could seriously change the financial sector, weakening the role of banks and making control of settlements more stringent. The regulator hopes that the launch of the digital ruble will become another impetus for the development of financial technologies in the country and will help to ensure additional stability of the economy.Related: Lines in the sand: US Congress is bringing partisan politics to cryptoHowever, some economists in Russia are afraid that the introduction of the digital ruble on the Russian market may turn into a ban on cryptocurrencies. The overall interest in cryptocurrencies is caused by a whole range of advantages that the technology brings, including the possibility of making cross-border payments.The Russian government may be wary that the ban on cryptocurrencies could lead to an outflow of funds from the country and the departure of many miners and crypto activists to the black market. Borshenko believes that Russia will not prohibit cryptocurrencies when introducing the digital rouble:“The authorities are currently showing a positive attitude. Vladimir Putin, in the middle of October, said that cryptocurrencies may exist as a means of payment.”

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Russia’s largest bank struggles to register its digital asset platform

Sber, Russia’s largest bank, is apparently struggling to obtain a regulatory approval for its digital asset issuance platform as the company continues delaying registration plans.Sber CEO Herman Gref announced Dec. 7 that the bank now expects to get its digital asset issuance platform registered with the Bank of Russia by the end of 2021, local news agency Prime reported.”We are in constant contact with the central bank, and we are discussing various issues. We really want to believe that the platform will be registered by the end of this year,” Gref said.The new comments come almost a year after Sber initially filed an application with the Bank of Russia to launch a blockchain platform for its Sbercoin stablecoin in January 2021. At the time, Sber’s director of transactions, Sergey Popov, said that the registration procedure usually takes no longer than 45 days. As such, the bank was expecting to launch its platform and the stablecoin by spring 2021.While unable to move forward with the plans by the fall, Sber then said that it was planning to register its digital asset issuance platform in September.Sber did not respond to Cointelegraph’s requests for comment on the matter.Related: Crypto is a hedge for 46% of Russian retail investors, survey statesSber’s delayed plans hardly come as a surprise, as Russia’s central bank has taken a hard stance on cryptocurrencies like Bitcoin (BTC), and has even barred some major banks from offering crypto investment services. The bank has said that such services do not “meet the interests of investors and bear great risks.”In the meantime, Bank of Russia governor Elvira Nabiullina believes that tools like central bank digital currencies should serve as a good option for governments to replace decentralized cryptocurrencies.

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