A pilot program, sanctioned by the Bank of Russia, was developed, and recently completed, by Russian mining industry giant, Nornickel.
This pilot, which took place within the bank’s regulatory sandbox was structured as a means to test the veracity of the benefits surrounding digital assets, and the potential role they can play in finance.
The pilot saw a platform developed by Nornickel, which provides its clients with various capabilities surrounding digital assets. Through the use of ‘hybrid tokens’ the platform provides, but isn’t limited to, tokenization of…
The goal hoped to be achieved through offering these services is two-fold, like most tokenization platforms.
- Provide companies easier access to financing opportunities
- Provide investors with an increase palette of investment choices.
The Bank of Russia did not embark on this endeavour for the fun of it. They have noted the potential role that digital assets will play in the future of finance, and are looking to prepare themselves accordingly.
As such, they have now submitted framework surrounding digital assets, in hopes of seeing new amendments made to Russia’s current laws governing crypto – Framework established during Nornickle’s time in the bank’s regulatory sandbox.
We have previously taken a look at a few of the laws governing blockchain in Russia, which the nation’s central bank hopes to see amended. Make sure to peruse the following article to see the areas which stand to, potentially, be altered.
As stated, the Bank of Russia, only today, released a statement on the successful completion of the pilot program. The following is a translation of commentary provide by the bank.
Ivan Zimin, Director of the Financial Technology Department of the Bank of Russia, states,
“It was one of the largest sandbox projects. We have studied in detail the new business model and its compliance with the needs of the market. An important part 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. As a result 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 solutions in the emerging market of digital assets, which were supported by the government agencies and business.”
Seeking a Friendly Hand
Establishing a clear framework surrounding digital assets is clearly of importance when gauging industry development. As industry participants look to continue expanding their products and services, we have seen many begin seeking out nations which have had the foresight to implement such framework.
One company, recently covered, that is doing just that, is Smartlands – a UK based tokenization platform. Smartlands recently announced that they would be basing their future moves on the Liechtenstein Blockchain act.
While news of a potential implementation of government backed framework is, no doubt, welcome, Russia has remained skeptical of the cryptocurrency industry at large. Tokenization of assets and financial instruments in a regulated manner are one thing, but cryptocurrency transactions are another beast entirely.
Russia has taken a trepidatious stance towards trading cryptocurrencies, as they link them to potential money laundering schemes. This stance has been reiterated as recently as February 17, 2020 by the Bank of Russia, as they look to update ‘Directive 375-P’ – essentially a manual for identifying illicit financial activity.