Russia’s Ministry of Finance Proposes Allowing Traditional Exchanges to Handle Digital Asset Trading for Select Investors

Russia’s Ministry of Finance Proposes Allowing Traditional Exchanges to Handle Digital Asset Trading

In a groundbreaking move, Russia’s Ministry of Finance has put forth a proposal to allow traditional exchanges to handle digital asset trading for select investors. This proposal, outlined in a government draft response to two pieces of regulation, suggests creating special regulations for organized trading in digital currency, recognized as a commodity, based on an exchange license or a trading system license.

The proposal would only extend these licenses to a limited circle of ‘particularly qualified’ investors, without specifying the qualification criteria. Currently, the Russian Central Bank’s register of licenses of exchanges and trading systems includes seven companies, such as Moscow Exchange and St. Petersburg Exchange.

Anatoly Aksakov, Chairman of the State Duma Committee on Financial Markets, expressed confidence in the ability of the largest Russian exchanges to support crypto flows and indicated that companies could quickly join the process under the right legal conditions. He also noted that certain exchanges are already working on related matters.

In addition to the exchange proposal, the government response addresses crypto mining regulation and crypto settlements in an experimental legal regime. It describes a recognized status for digital currencies and the potential for foreign exchange transactions with digital currencies, including their use as a means of payment in foreign trade agreements.

Prime Minister Mikhail Mishustin has instructed various entities to create an international crypto payment mechanism by 2022, with legislation potentially granting the central bank the authority to develop an experimental international crypto settlement platform starting in September. The draft response emphasizes that general regulation could accommodate digital asset payments in foreign trade if the assets receive the appropriate status.

Furthermore, Russia is exploring the legalization of stablecoin use for international payments and is looking to advance the use of central bank digital currencies (CBDCs). These developments signal a significant shift in Russia’s approach to digital assets and could have far-reaching implications for the country’s financial sector.