According to the top management of the Russian central bank, it is not in favor of legalizing crypto payments in the country, even though it does support digital financial assets development.
The monetary authority said that it was developing a number of regulatory proposals and intended to submit them to the parliament by the year-end.
A legislative package is in the works by the Central Bank of Russia (CBR), which it intends to file with the lower house of parliament called the State Duma.
The legislation is for regulating digital financial assets (DFA), a term that was coined under Russian law to define tokens and coins that are issued by an entity, as compared to cryptocurrencies such as bitcoin which have no issuer.
Olga Skorobogatova attended a forum called Finopolis that was aimed at financial innovations. The deputy chairman of the Russian central bank said that there are three main objectives of the proposal.
These are to regulate smart contracts, develop exchange platforms and eliminate tax arbitrage for better taxation.
The banking executive pointed out that the Russian Federation has recorded a strong interest when it comes to the development of digital financial assets (DFA).
She said that it could turn out to be a great and useful tool for participants in the financial markets.
She further revealed that there were nine applications under consideration by the monetary authority, which had been submitted by companies interested in getting a license to issue their own digital financial assets (DFAs).
She noted that they had already granted approval to three operators to do so, which were Lighthouse, Atomyze and Sberbank.
Meanwhile, the Governor of the Russian Central Bank, Elvira Nabiullina, spoke in the Duma and said that they were in complete support of developing digital financial assets.
However, she added that they were not in favor of the use of private cryptocurrencies to make payments.
She insisted that cryptocurrencies are not the only item that fall under the category of digital financial assets (DFAs).
She emphasized that their stance had remained unchanged where private cryptocurrencies are concerned because it is unclear as to who is responsible for them and how.
Therefore, private cryptocurrencies carry a lot due to their opaque nature and their use in settlements is not a good idea.
For over a year, the Russian Federation has been discussing the legal status of cryptocurrencies in the country and working on their regulation.
Since the beginning, the Central Bank of Russia (CBR) has been against cryptocurrencies and went as far as suggesting a blanket ban on all things related to crypto, including trading and mining.
But, there has been some softening in the last few months in light of the Western sanctions that have been imposed due to the Ukraine invasion.
Since it has been cut off from the global financial system, the monetary authority of Russia has agreed that the use of crypto for making international settlements could be legalized, but not for domestic use.