Russia Creates Regulated Digital Currency Market with Intermediary Roles

Russia is introducing a regulated digital currency market with the aim of providing convenience to customers. The new law assigns roles to a broker, exchange, clearing service, and depository, which are familiar concepts in global practice but with some distinct features.

The key advantage for customers will be the ability to buy cryptocurrency with rubles in a familiar app, receive statements, and submit complaints to Russian companies. However, this convenience comes at the cost of dependence on an intermediary and their rules.

Crypto assets will be stored on a blockchain, but whoever holds the private key will have control over them. This raises questions about ownership and effective control, as customers may lose access to their assets if a foreign custodian stops serving a Russian counterparty.