Bank of Russia to ban mutual funds from investing in Bitcoin

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The Russian central bank continues its strict policies regarding the cryptocurrency industry, now officially banning mutual funds from investing in cryptocurrencies like Bitcoin (BTC).

On December 13, the Bank of Russia released an official statement on the regulation of investment opportunities by mutual funds.

Despite the increase in the number of assets available for investment by mutual funds, the document prohibits fund managers from purchasing cryptocurrencies as well as “financial instruments whose value depends on the prices of digital assets. “.

The statement emphasizes that mutual funds are not permitted to provide crypto exposure to qualified or unqualified investors.

The Bank of Russia previously recommended that asset managers exclude cryptocurrencies from mutual fund exposure in July 2021. According to a report by local news agency RBC, no Russian mutual funds has not been exposed to crypto although there has been no formal ban so far.

Artem Deev, head of the analysis department at brokerage firm AMarkets, reportedly said Russia has so far only had one industry-linked exchange-traded fund (ETF). According to Deev, the fund is managed by the stock management company “BrokerCreditService” and invests in companies focused on decentralized data storage and blockchain, including companies like Jack Dorsey’s Block, PayPal and Broadcom.

Russia’s largest bank, Sber, is also reportedly planning to launch a blockchain-focused ETF, Sber’s director of asset management Vasily Illarionov said. The ETF will be called “Blockchain Economy” and will invest in stocks related to blockchain adoption. Illarionov noted that the fund does not fall under Bank of Russia restrictions and can be offered to retail investors.

Related: Russia’s Largest Bank Struggles To Register Its Digital Asset Platform

As previously reported, the Bank of Russia has taken a tough stance on cryptocurrencies and has banned some major banks from offering crypto investment services. The regulator argued that such services “do not meet the interests of investors and carry great risks”.

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