Russia Proposes New Tokenization Framework, Says Crypto Transactions Are Suspicious

The Central Bank of Russia (CBR) has completed a pilot project for the issuance of tokenized assets, but at the same time, is planning to label crypto transactions as suspicious, the bank said in a press release on 17 February.

According to the report, the successfully piloted platform will enable users to tokenize goods, services, securities, and other assets, and issue them to investors. There has also been a proposal from the director if the CBR, Ivan Zimin, that the platform is used as a framework for the country’s upcoming crypto law.

Zimin said in the press release:

“This was one of the largest sandbox projects. We studied in detail the new business model and its relevance to market needs. Based on the pilot results, the Bank of Russia proposed including 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 agencies and businesses.”

According to local news outlet RBC, the country’s central bank is planning to update its bank guidance, on what can be considered criminal activity, for the first time in eight years. Though still under in-house assessment, the new guidance is likely to label the sale and purchase of crypto as suspicious, and ask commercial banks to flag such activities, and either block the transactions or even close the accounts of clients that trade cryptocurrencies.

This move from the central bank could indicate that Russia is now trying to create a regulatory distinction between tokenized assets, which are easier to integrate into existing financial laws, and cryptocurrencies.

In December, it became known that the CBR was supporting the idea of banning cryptocurrencies as a means of payment in the country. At the time, the bank claimed that cryptocurrencies continue to carry significant risks, such as their potential to be used for money laundering, financing terrorism and their sharp exchange rate fluctuations.