Russia’s central bank wants to ban investment companies and mutual funds from investing in cryptocurrencies.
This was stated in an official note published a few days ago.
Russia’s decision to ban investment funds from investing in cryptocurrencies
This is a proposal that would like to make some changes to the bank’s own ordinance of 5 September 2016 on the composition and structure of mutual funds’ assets.
These changes are not yet operational, and the bank has given until 27 December to send feedback and suggestions on the proposal.
The central bank has already spoken out against cryptocurrencies several times in Russia, but without finding sufficient political support to come up with an effective ban.
However, the aim of this initiative is merely to specifically ban mutual funds from acquiring cryptocurrencies or related financial instruments, such as derivatives like futures or options.
According to the Russian central bank, this initiative would serve to protect the funds themselves and the rights of their investors.
There is no guarantee that such changes will actually be enacted in the end, but the bank already warned asset managers earlier this year that they should not include cryptocurrencies in their mutual funds. The chances of success for this new initiative would therefore appear to be high.
In July, the bank also advised Russian stock exchanges to avoid listing financial products related to cryptocurrencies and recommended that brokers refrain from offering derivatives on such assets to unqualified investors.
Russians and cryptocurrencies
At the same time, alternative assets such as cryptocurrencies are reportedly present in more than half of the portfolios of unqualified investors in the country, with 46% of Russians considering digital currencies as a hedge investment for the future, according to a survey.
Banning or limiting investments in cryptocurrencies has been discussed in Russia for some time, but as these measures are decidedly unpopular, they have never been implemented.
The specific case of the ban on mutual funds, on the other hand, seems to be easier to bring about, because the decision seems to lie solely with the central bank, without the direct involvement of politicians.