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Tokenized Assets Or Cryptos? Central Bank Of Russia Caught Between Two Stools
The Russia Central Bank (CBR) is intending to form a legal framework for tokenization, and devises diplomacies to carry scepticism on cryptocurrency transactions by labelling them suspicious activities.
The CBR has made an announcement to propose tokenisation as they effectively launched a platform that enables users to tokenize assets, including equities and currencies, and issue them to investors.
In the regulatory “sandbox” of the Bank of Russia, piloting of a blockchain platform for the issue and circulation of digital rights has been successfully completed. It allows you to digitize (tokenize) goods, services, securities and other assets.
Ivan Bank, the director of CBR’s Financial Technologies Department revealed his stances about the projects:“It was one of the largest sandbox projects. We studied in detail the new business model and its relevance to market needs. An important detail of the service is the use of hybrid tokens, which make it easy to adapt to the needs of business and consumers and provide flexible solutions to attract investment. 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”.
The blockchain platform was developed by PJSC MMC Norilsk Nickel and will be able to begin its activities after the adoption and entry into force of the draft federal law “On Digital Financial Assets”, which was finalized according to the pilot’s results.
Nevertheless, the CBR has come out with a potential ban on bitcoin and other cryptocurrency mode of payments back in the last November, asserting significant risks factors and claimed that awarding cryptos with legal tender is unlikely.
Now, again recalling that the regulatory “sandbox” of the Bank of Russia is expected to test innovative technologies and services in the financial market and, if successfully piloted, initiate the preparation of legislative changes aimed at removing barriers to their implementation.
Although there is lingering pessimism due to the recent years’ downtrend or volatility or growing scams or fraudulent activities of the cryptocurrencies that may have caused great cause of concern for some investors, we kept reiterating that the buzz world, ‘tokenization mechanism’ is quite different that hasn’t been the latest. Some constructive developments in the gamut of stable coin and tokenization is good thing to stimulate FinTech world.