Russia’s primary financial regulator, the Bank of Russia (BOR), has issued a new directive to mutual funds operating their businesses within the jurisdiction of Russia. The new rule restricts mutual funds from investing in all forms of digital assets.
On Monday, the top Bank released a statement on restricting mutual funds investments in the nascent sector. According to them, mutual funds would not be allowed to invest in Bitcoin, Ether, or any financial instruments that rely on the price of cryptos.
Central Bank Prohibits Mutual Fund Managers From Crypto Investments
B.O.R. disclosed that asset management firms are prohibited from acquiring digital coins and financial instruments that rely on the prices of these cryptos. The statement from the top Bank emphasizes that asset managers are not to provide any crypto exposure to all categories of investors.
This isn’t the first time the B.O.R. has issued a directive targeted at cryptocurrencies. In July, the financial regulator banned stock exchanges from providing financial instruments exposure. It also urged mutual funds companies to refrain from engaging with the instruments due to their dependence on crypto prices.
Crackdown On The Crypto Industry Continues
The rousing calls from experts and concerned investors to regulate the industry have caused regulators in various countries to swing into action. Since China’s move against the use of cryptocurrency in the country, several others have followed suit in a bid to “protect investors and the economy.”
Bank of Russia is renowned for its strict stance towards digital assets, and this is evident in the number of policies it has rolled out over the past year. Last month, the top Bank published a review of the financial stability report, with the document revealing that the volume of crypto transactions in the country has eclipsed $5B.
Russia is an active nation when it comes to crypto transactions. Due to its population, the country has positioned itself as a critical player in the crypto space globally, with transactions amounting to $2.8T.
This is no surprise, given that the country is now one of the top spots for Bitcoin mining activities. According to the stability report, Russia Ranks third based on mining hash rates, making it one of the largest BTC mining locations in the world.
The massive exodus in May, instigated by China due to its ban on crypto mining, benefited Russia immensely. Most miners headed towards the country due to its cold weather condition and slightly cheap energy.
Despite Russians’ growing interest in crypto, the Central Bank has remained firm, obstinate, and harsh to the industry. The B.O.R. cites a lack of protection for investors and the potential to use the industry as a tool to carry out money laundering and other criminal activities as reasons for their unfriendliness.
According to B.O.R., bridging the gap between the traditional financial sector and cryptocurrency is a move that the Bank won’t easily support. This became evident when the regulator urged banks to intercept suspicious crypto accounts. The B.O.R. will remain steadfast in its approach to protect investors and the country’s economy by combating scams and money laundering activities.