Russia's Central Bank Proposes New Token Framework, But Labels Crypto Transactions 'Suspicious'

The Central Bank of Russia has formally proposed a legal framework for tokenization, but also plans to label cryptocurrency transactions as suspicious activity, it said in a press release Monday.

Ivan Zimin, director of the CBR's financial technology department, said in the release that the bank had now proposed using the platform as a framework in the country's upcoming cryptocurrency law, which will act as guidance for legitimate businesses wanting to tokenize assets.

"Based on the results of the piloting, the Bank of Russia proposed to include in the draft federal law"On Digital Financial Assets" the provisions necessary for the introduction and development of such decisions in the emerging digital assets market, which were supported by government bodies and businesses," Zimin said.

According to business news site RBC, both the sale and purchase of cryptocurrencies could be considered suspicious under the new guidance.

"Russia seems to have taken one step forward, two steps back when it comes to crypto," Guo said, adding it would leave "Russian traders scratching their heads" as other major economies, such as the U.S and China, continue to offer conflicting advice on how to regulate cryptocurrencies.

"Whether regulators like it or not, the adoption of digital currencies will continue, and dismissing cryptocurrencies comes with an opportunity cost."

Since 2017, the Russian government has been drawing up a bill that would regulate cryptocurrencies and related activities such as initial coin offerings and trades with fiat currencies, like the ruble.

The Russian parliament passed a digital rights bill in early October that outlined basic "Digital rights" in Russian law and also provided legal definitions for smart contracts and cryptocurrencies.

Monday's news now suggests Russia is now trying to create a regulatory distinction between asset tokenization, which can more seamlessly be integrated into existing financial law, and cryptocurrencies, which cannot be as easily supervised and managed by the authorities.

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