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Russia Digital Asset Legal Framework for Tokenisation

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The Central Bank of Russia (CBR) announced this week a pilot project leveraging blockchain for the issuance of “digital rights” has been completed. The project is intended to allow the tokenisation of goods, services, and other assets including securities. The issuance of tokens could include hybrid assets and that any organisation, if accepted, could use the sandbox to issue digital tokens.

The bank subsequently proposed to amend Russia’s digital assets law to accommodate tokenisation platforms.

The blockchain platform was developed by PJSC MMC Norilsk Nickel and will be able to start its activities after the adoption and entry into force of the draft federal law “On Digital Financial Assets”, which was finalised according to the pilot’s results. The platform is open to all organisations and it allows them to issue hybrid tokens backed by a basket of assets. The technology is said to expand financing possibilities for businesses, while giving new investment options for its users.

Simultaneously, the Bank of Russia also said it intends to strengthen anti-money laundering legislation on cryptocurrency:
“Banks will be able to block customer accounts for making dubious transactions, which include operations with virtual assets, as well as cash withdrawals from corporate cards and the use of executive documents. This will become possible when the Central Bank makes changes to banking practice in the field of anti-laundering legislation.”

CBR is reportedly planning on updating bank guidance on what constitutes criminal activity. Both the sale and purchase of cryptocurrencies could be considered suspicious under the new guidelines. The CBR would ask commercial banks to flag activity and authorises them to block transactions, and even close the accounts, of any clients found to be trading cryptocurrencies.

Since 2018

In January 2018, the Russian parliament had begun work on a bill regulating the usage of digital assets. There have been multiple delays to the adoption of the bill, which still remains under consideration as of February 2020. Though Russia’s new Prime Minister back then had identified the digital economy as one of the government’s key priorities, progress in the digital economy was not in unison. Alongside the complex decision-making process, several ministries and the central bank were reportedly considering a ban of cryptocurrency for payments in previously, as well as plans for a legal framework to “confiscate” Bitcoins.

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