Russian Central Bank Asks Stock Exchanges Not to List Crypto Firms
- The restrictions are only for retail investors and not for accredited investors.
The Bank of Russia has issued a recommendation for local stock exchanges this week, asking them not to list stocks of any companies with their businesses tied to Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term.
The letter signed by the First Deputy Chairman of the Bank of Russia, Sergei Shvetsov, asked the stock exchanges to avoid listing any local or foreign crypto companies.
It particularly specified the prohibited companies that depend on cryptocurrency rates, prices for foreign digital financial assets, changes in cryptocurrency and crypto-asset indices. Additionally, the regulator does not want the listing of crypto derivatives and securities of cryptocurrency funds.
Furthermore, the central bank instructed the fund mutual fund managers, brokers and trustees not to include companies with crypto exposure in their managed portfolios.
“Cryptocurrencies and digital assets are characterized by high volatility, lack of transparency in pricing, low Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term, technological, regulatory and other specific risks,” the Bank of Russia explained (translated from Russian). “The purchase of financial instruments linked to them entails increased risks of losses for people who do not have sufficient experience and knowledge.”
Crypto Stocks Are Risky
But, the recommended restrictions are only for retail investors as professional and accredited investors will still be allowed to invest in crypto-related company stocks.
The regulatory recommendation came when several crypto companies are running to the major stock exchanges in America, Europe and Asia for a public listing of their stocks. In addition, it shows Russia’s reluctance to promote the entrance of crypto firms into the mainstream financial sector.
“The recommendations of the Bank of Russia are a preventive measure. They are aimed at preventing the offer of such instruments to the mass investor,” the central bank added.
However, the Russian regulator clarified that its restrictions do not apply to central bank digital currencies and other digital financial assets issued under Russian law in information systems whose operators are included in the register of the Bank of Russia.
The Bank of Russia has issued a recommendation for local stock exchanges this week, asking them not to list stocks of any companies with their businesses tied to Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term.
The letter signed by the First Deputy Chairman of the Bank of Russia, Sergei Shvetsov, asked the stock exchanges to avoid listing any local or foreign crypto companies.
It particularly specified the prohibited companies that depend on cryptocurrency rates, prices for foreign digital financial assets, changes in cryptocurrency and crypto-asset indices. Additionally, the regulator does not want the listing of crypto derivatives and securities of cryptocurrency funds.
Furthermore, the central bank instructed the fund mutual fund managers, brokers and trustees not to include companies with crypto exposure in their managed portfolios.
“Cryptocurrencies and digital assets are characterized by high volatility, lack of transparency in pricing, low Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term, technological, regulatory and other specific risks,” the Bank of Russia explained (translated from Russian). “The purchase of financial instruments linked to them entails increased risks of losses for people who do not have sufficient experience and knowledge.”
Crypto Stocks Are Risky
But, the recommended restrictions are only for retail investors as professional and accredited investors will still be allowed to invest in crypto-related company stocks.
The regulatory recommendation came when several crypto companies are running to the major stock exchanges in America, Europe and Asia for a public listing of their stocks. In addition, it shows Russia’s reluctance to promote the entrance of crypto firms into the mainstream financial sector.
“The recommendations of the Bank of Russia are a preventive measure. They are aimed at preventing the offer of such instruments to the mass investor,” the central bank added.
However, the Russian regulator clarified that its restrictions do not apply to central bank digital currencies and other digital financial assets issued under Russian law in information systems whose operators are included in the register of the Bank of Russia.