Bank of Russia Moves to Safeguard Crypto Companies Against Sanctions – In light of sanctions risks, the Central Bank of the Russian Federation (CBR) has permitted issuers of digital financial assets (DFAs) to withhold sensitive information. The exemption, which is in effect until 1 July 2023, pertains to information indicating the beneficial owners of such entities. According to an announcement quoted by Russian crypto media, the temporary reporting relief is part of a package of measures meant to help persons and organizations operating within the Russian financial market infrastructure.
While Russia has yet to regulate cryptocurrencies such as bitcoin, the existing law “On Digital Financial Assets” allows businesses to produce coins and tokens in restricted conditions. Three “operators of information systems in which DFAs can be issued” have been already licensed by the CBR. These are Russia’s largest bank, Sber, the tokenization service Atomyze, and Lighthouse.
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The Bank of Russia noted in a press statement that the regulatory and supervisory relief granted to financial market participants including DFA issuers since the beginning of the year is aimed to reduce the burden on these institutions in light of the present economic and geopolitical situation.
Expanding Western sanctions against the Russian government and businesses have been introduced in response to Moscow’s decision to invade Ukraine in late February. The sanctions have severely limited their access to global financial institutions and markets.
A proposal to allow the use of cryptocurrencies for international settlements in an effort to alleviate sanctions pressure has been supported by Russian institutions, including the central bank, which has historically held a strong stance on crypto regulations.
The CBR stated that the assistance provided to financial institutions, such as DFA issuers and exchange operators, has mitigated the detrimental consequences of the restrictions and allowed them to adapt to the new conditions. Additional measures in the same direction, such as legislation permitting the acknowledgment of losses caused by sanctions, are planned by the regulator.
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