invezz.com
The Bank of Russia has released a report which specifically asked local exchanges to reject crypto exchanges that want to get listed. The report is coming as many cryptocurrency exchanges are increasingly considering going public.
The Russian Central Bank issued the advisory on February 19, telling the stock exchanges in the country to avoid crypto exchanges and other firms dealing with crypto-related businesses.
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The central bank explained that it’s dangerous for Russian exchanges to list stocks from companies that rely on prices in the crypto market. The bank specifically mentioned crypto exchanges, crypto funds, crypto derivatives, crypto-tracking indexes, as well as financial assets issued outside Russia.
Asset managers also warned
The apex bank also warned asset managers to desist from including such instruments in mutual funds. The bank also stated that the exchanges should not expose these investment options to investors, especially the non-accredited ones.
The bank reiterated that the directive serves as a preventive mechanism against the highly risky exposure towards such asset class. The bank added in an official notice,
They are designed to prevent a mass investor adoption of such instruments.
However, authorized digital assets and central bank digital currencies do not apply to these recommendations, according to the statement.
Highly risky investments
The Russian central bank explained the reasons for its advice. According to the bank, digital assets and cryptocurrencies have several issues, including regulation-related risks, low liquidity, obscure price discovery, as well as high volatility. As a result, buying financial instruments linked to such assets will be highly risky and can cause great losses to people with little knowledge and experience in investment.
The latest move by the Bank of Russia is another indication that it’s not ready to embrace cryptocurrency. However, it still fancies the development and growth of central bank digital assets (CBDC).
The Russian central bank has also prevented local banks like Tinkooff from offering crypto-related services and trading.
Russia is not alone when it comes to companies against cryptocurrencies but in support of CBDCs. China, which is leading the chase in CBDC, recently placed a strict ban on crypto miners.