Bank of Russia bans mutual funds from investing in Bitcoin

Mutual investment funds in Russia are not allowed to offer cryptocurrencies to qualified or unauthorized investors.

The Central Bank of Russia continues its strict policy towards the crypto industry and now officially prohibits mutual funds from investing in cryptocurrencies such as Bitcoin (BTC).

On December 13, the Central Bank of Russia issued an official statement regulating the investment opportunities of mutual funds.

Despite the expansion of the number of assets available for mutual funds, the document prohibits fund managers from buying cryptocurrencies, as well as “financial instruments, the value of which depends on the price of a digital asset.”

The statement emphasizes that mutual funds are not allowed to offer cryptocurrency to qualified or unauthorized investors.

The Central Bank of Russia previously recommended that asset managers exclude cryptocurrencies from mutual funds by July 2021.

Artem Deev, head of analytical department at brokerage company AMarkets, said that currently there is only one industry-specific exchange-traded fund (ETF) in Russia. The fund is operated by public company BrokerCreditServices and invests in companies that specialize in decentralized storage and blockchain, including Jack Dorsey’s Block, PayPal and Broadcom, Deev said.

Russia’s largest bank, Sberbank, is reportedly also planning to launch a blockchain-focused ETF, said Vasily Illarionov, head of Sberbank’s asset management. The ETF will be called Blockchain Economics and will invest in stocks associated with blockchain adoption. Illarionov noted that the fund is not subject to the restrictions of the Central Bank of the Russian Federation and it may be available to private investors.

On the subject: Russia’s largest bank is struggling to register its digital asset platform

As previously reported, the Central Bank of Russia has taken a tough stance on cryptocurrencies and has banned several large banks from offering crypto investment services. The regulator argued that such services “are not in the interests of investors and are associated with great risks.”