Russian Mutual Funds Banned From Holding Crypto: Central Bank Directive

The Central Bank of the Russian Federation banned local mutual funds from investing in cryptocurrencies or instruments that give exposure to digital assets.

What Happened: We will not be seeing Russian mutual funds investing in Bitcoin BTC/USD anytime soon, since the local central bank stated in an official statement published on Monday that those institutions cannot buy crypto or “financial instruments whose value depends on prices of digital assets.”

See Also: IS REGULATION BAD FOR CRYPTO?

In the document, the CBR proposes to increase the list of indices that can be held by Russian mutual funds from 42 to 79. Although the central bank makes it clear that exposure to digital assets — direct or indirect — is not allowed, whether a fund is working with qualified or unqualified investors makes no difference.

The CBR also indicated that cryptocurrencies cannot be used as a means of payment because of their high volatility.

The announcement follows Aleksandr Pankin, Russia's deputy minister of foreign affairs, suggesting in late October that cryptocurrencies could be an alternative asset to the United States dollar in the country's economy. Also in October, Russian President Vladimir Putin said cryptocurrencies have value and that he accepts their use for payments.

Related Link: India Won't Ban Cryptocurrency, Will Regulate It As New Asset Class