The Russian central bank has examined three platforms that offer crypto-related services. The projects were tested in their regulatory sandbox during 2020. Since the creation of the closed regulatory environment about three years ago, Bank of Russia has received dozens of requests to pilot various financial services.
CBR Pilots 3 Crypto Projects in 2020
The Central Bank of the Russian Federation (CBR), also known as the Bank of Russia, launched the sandbox back in 2018 as developments in financial technology and decentralized digital assets presented regulators with new challenges. Since the initiative began, over 70 companies, including financial institutions and fintech companies, have asked regulators to test their new products, services, technologies and business models.
The recently released CBR Annual Report 2020 shows that the bank added three crypto platforms to the sandbox over the past year. According to RBC, Centrobank reviewed the operation of a cryptocurrency mining pool, a crypto payment system and an investment platform for digital assets. No information was given on the current test results. In the event of a positive outcome, the Bank of Russia is expected to present a roadmap for its integration into the legal framework of the Russian financial sector.
The Bank of Russia offers secure space for crypto projects
In July, the Russian parliament passed a federal law that provides for the introduction of special legal systems for testing digital innovations, including in the financial sector. The central bank uses its regulatory “safe space” to examine the potential impact of such projects in an isolated environment and to identify the risks associated with innovative financial services and technologies. The CBR can also define the steps that need to be taken to create conditions for its implementation in the market.
The Bank of Russia has spoken out against legalizing cryptocurrencies in the country in the past, but has offered to allow crypto mining as long as miners sell their coins outside of Russia’s borders. With the Digital Financial Assets Act going into effect in January, digital coins are now recognized and regulated as property.
However, Russians cannot use cryptocurrencies for payments, government officials are not allowed to own crypto, and investments are limited for ordinary citizens. Earlier this year, an annual limit of 600,000 rubles (approximately USD 8,000) was introduced for crypto investments by “unqualified” market participants.
The central bank is currently working on a digital ruble project and is expected to unveil the first prototype of the CBDC platform by the end of this year. If everything goes according to its original plan, testing should begin in 2022. Last summer, after consulting with Russian financial institutions, CBR presented an updated concept of the digital ruble to create a digital currency that is more convenient for the banking sector.
How do you rate the testing of crypto-related products and services in regulatory sandboxes? Do share your thoughts on the matter in the comments section below.
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