The Central Bank of Russia (CBRF) is looking for ways to integrate crypto-assets and blockchain technology into its local financial system amid growing global financial sanctions.
In a Telegram message from the Central Bank of the Russian Federation on November 7, the central bank shared a public consultation report titled "Digital Assets in the Russian Federation."
It looks at how the linked country can open up its domestic market to foreign issuers of digital assets - especially from "friendly countries".
Other areas of focus in this report are digital asset regulation, retail investor protection, digital property rights related to smart contracts and tokenization, and proposals for accounting and tax reform.
CBR says it strongly supports "further digital technology developments" as long as they do not create "uncontrollable" financial or cyber security risks for customers.
In addition to the birth of blockchain technology, the Central Bank of the Russian Federation stated that the same regulatory rules regarding the issuance and circulation of traditional financial instruments should also apply to digital assets.
The Central Bank of the Russian Federation said that the short-term rules should focus on protecting the rights of investors, strengthening the rules for accepting digital assets in circulation, ensuring the accreditation of issuers and ensuring that issuers disclose all relevant information to investors.
The central bank's Telegram message, originally written in Russian, said the legal framework for digital assets is in place, but better regulation is needed for their further development.
"Russia has created the necessary legal framework for the issuance and circulation of digital assets [...] but the market is still at an early stage of its development [...] and is several times smaller than the traditional financial instruments market. Better regulation is necessary for further development.
Regarding the regulation of smart contracts, the central bank acknowledges that the legal framework exists, but it suggests that Russian-made smart contracts should undergo an independent audit before use.
The CBR is also positive about the potential of off-chain tokenized assets. However, the bank noted that legislation is needed to ensure there is a "legal relationship" between token holders and tokens.
Related : Russian officials approve use of cryptocurrency for cross-border payments: report
The report comes after Russia's Ministry of Finance recently approved the use of cryptocurrencies as a cross-border payment method for Russian residents on September 22.
However, the CBR's 33-page report makes no mention of increased sanctions against Russia and their disastrous impact on its economy, nor does it mention the looming Russian-Ukrainian war. Now it is being developed in Ukraine.
But he pointed to a separate report under development, which is the Central Bank of Russia's new digital currency (CBDC) - the digital ruble - which is expected to be tested in early 2023.
In August 2022, the Central Bank of the Russian Federation announced that it plans to introduce a digital ruble in all Russian banks by 2024.