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    Report: Role of cryptocurrencies in the Russian economy

    TheMorningCrypto Desk
    TheMorningCrypto Desk
    Published on November 8, 2022 5:10 PM

    Updated on January 9, 2023 12:50 PM

    As international financial penalties continue to mount, the Central Bank of Russia (CBR) is apparently looking at methods to incorporate blockchain technology and crypto assets into its native monetary system.
    Report: Role of cryptocurrencies in the Russian economy
    Source: think.ing

    A detailed study on the Russian central bank's goals for cryptocurrency regulation has been released. On November 7, the bank published a Telegram thread including a public consultation study titled "Digital Assets in Russian Federation." It takes into account the possibility of the sanctioned nation opening up its domestic market to international digital asset issuers and looks at the role that cryptocurrencies play in the Russian economy.

    Russia has been trying to monetize its natural resources and move away from the US dollar, which is a potent tool for sanctions and continues to be the currency of note in the resource trade market. This has led to the role of cryptocurrency in the country, and in particular, the central bank's increasing openness to crypto technology. Vladimir Putin, the president of Russia, campaigned for cryptocurrencies and their potential for the Russian economy before invading Ukraine.

    The document also contains recommendations for reforms in accounting and taxation, safeguards for small investors, regulation of digital assets, and rights to digital property connected to smart contracts and tokenization.

    The CBR declared that it firmly supports the "further development of digital technologies," so long as they don't expose customers to "uncontrollable" hazards in terms of their finances or cybersecurity.

    Russia has now joined the expanding group of nations whose CBDC development is complete. The Bank of Russia will start connecting all banks and credit institutions to the digital ruble network in 2024, however, it will pilot in early 2023 according to the most recent monetary policy statement from the institution.

    Find out more about the CBDC and its current status in various nations here.

    According to the CBR, short-term regulation should concentrate on safeguarding investor rights, tightening regulations for putting digital assets into circulation, making sure the issuer is accredited, and making sure the issuer communicates all pertinent information to investors.

    Regarding the possibilities of tokenized off-chain assets, CBR was equally optimistic. To secure a "legal relationship" between the token holder and the token itself, the bank stated that laws would need to be put in place. The central bank admitted that there was already a legal framework in place for regulating smart contracts. However, it suggests that before being used, Russian-made smart contracts be subjected to an independent audit.