Russia Suggests Permitting Conventional Exchanges to Conduct Cryptocurrency Transactions

The Russian Finance Ministry has suggested permitting established stock exchanges to facilitate the trading of digital assets for a selected group of investors, according to a report by Interfax on July 10.

A proposal from the government regarding two regulatory acts indicates the potential for crafting targeted regulations that would govern the “organized trading of digital currency deemed a commodity, under an exchange or trade system licensing framework.”

This provision for licensure or authorization would be available exclusively to a selected group of ‘sophisticated’ investors, though no clear parameters for eligibility have yet been provided.

The register for exchange and trading system licenses maintained by the Bank of Russia lists seven entities: Moscow Exchange, St. Petersburg Exchange, the St. Petersburg International Mercantile Exchange (SPIMEX), the St. Petersburg Currency Exchange (SPCE), Eastern Exchange, National Commodity Exchange, and the CTS Exchange.

Anatoly Aksakov, the Chair of the State Duma’s Financial Market Committee, has stated to the press agency that major Russian trading platforms are already equipped for handling cryptocurrency flows. With adequate legal frameworks, these institutions could “promptly participate in these processes.”

Aksakov mentioned that certain exchanges have begun preparatory activities related to these initiatives.

Experimental Legal Framework

Within the government’s proposal that includes the exchange regulation suggestion, there is also reference to the governance of crypto mining and crypto transactions within an experimental legislative context.

The most recent government outline provides for an official status for digital currencies and touches on “the ability to perform foreign exchange operations with digital currencies, including their usage as a payment medium in international commercial agreements (contracts).”

In 2022, Prime Minister Mikhail Mishustin tasked various entities, including the Ministry of Finance and the central bank, with setting up a global crypto payment system. A statutory amendment might authorize the central bank to commence the creation of a pioneering platform for international crypto settlements as early as September.

The updated government proposal emphasizes that common legislation, as opposed to specialized frameworks, could be sufficient to manage digital asset transactions in international trade once digital assets are formally recognized.

Furthermore, Russia is reviewing the potential legalization of stablecoins for cross-border payments and is exploring ways to enhance the deployment of central bank digital currencies (CBDCs).