Russia Central Bank Directs Clearing Center to Quit Cryptocurrency Operations

The MFB Clearing Center, a company that provides clearing services in the securities market and commodity exchange market in Russia, was advised by The Russia Central Bank to quit off-exchange electronic contracts clearing operations related to purchase & sale of cryptocurrencies.

Russia’s Central Bank thoughts of high risk in the cryptocurrency market and low standard procedures from MFB led to this demand.

Two months ago, the MFB developed a new set of clearing rules along with off-exchange electronic contracts for cryptocurrencies. However, Russia’s Central Bank expressed the desire to undo MFB new set of rules.

The reasons behind this “demand” are: 

1) Lack of an adequate risk management system;
2) Cryptocurrencies are not regulated in Russia.

This past month in September 2017, the Russian government declared their ambition to build a regulatory framework for blockchain and linked technologies

Russia and Crypto

If we look at past developments coming from Russia with regards to the cryptosphere, the country was far from accepting/regulating cryptocurrencies. Financial authorities, at first, considered any type of money or currency issued by non-state approved entities to be illegal. During September, however, Russia’s finance ministry, Anton Siluanov, expressed his intentions to regulate the circulation of cryptocurrencies involving citizens and companies. He stated:

“The state understands indeed that cryptocurrencies are real. There is no sense in banning them, there is a need to regulate them.”

Although Russia is keen on incorporating cryptocurrencies into their economy, they are looking to create a specific regulatory framework that for crypto buyers. Siluanov shared an example:

“Buying of crypto-currencies should be similar to buying securities, such as treasury bonds for households launched by the finance ministry this year”.

Recent news also show Russian power companies developing a plan for the energy excess, the action plan might be to sell it to BTC miners. EuroSibEnergo, a leading company in the energy market, reported dozens of solicitations from miners on a daily basis. EuroSibEnergo has not accepted any of this requests and is most likely waiting for government clearance.

Russia has clear intentions of using cryptocurrencies in a regulated market, as it is practically impossible for the G8 to ignore the value of cryptos in the face of the constant devaluation of fiat currencies.

Recently, the Russian Ministry of Finance, Alexei Moiseev, has also expressed his views on Bitcoin use:

“We offer not to call it a currency, and not to regulate it as a currency. There’s a notion of  ‘other property’ in the Civil Code, so we may classify it as a financial asset and allow only qualified investors to buy and sell it at exchanges.”

A set of rules is being analyzed/created and more details will be shared with the qualified investors. Russia’s main priority is to track deals & transactions on all types of cryptocurrencies, something that may displease some users who are interested in crypto as a tool for their financial privacy.

It seems Russia is no longer having second thoughts about the benefits of cryptos and are now looking to track and regulate cryptocurrency orders and transaction in order to keep an eye on any illicit activity.