Russia sees promise in tokenisation but flags legal challenges
The Bank of Russia's latest report highlights the transformative potential of tokenising real-world assets while emphasising the need to address regulatory challenges for broader adoption.
Released on November 22, the report underscores how tokenisation can enhance liquidity and enable fractional ownership, opening new opportunities for investors and issuers.
However, it identifies significant obstacles, including the lack of a universal definition and classification for tokenised assets and inconsistent global regulatory approaches.
Unclear tax implications further complicate adoption and may deter market participants.
The report reviews Russia’s legal framework, noting that the current "digital rights framework," encompassing digital financial assets, utilitarian digital rights, and hybrid digital rights, is well-suited for tokenisation.
It also highlights the potential for digitising various rights under existing laws.
Despite this progress, unresolved issues surrounding the classification and regulation of specific asset types require further attention.
To promote innovation while mitigating risks, the Bank of Russia has established a regulatory sandbox to test financial technologies, including tokenisation.
The bank is also inviting public input on tokenisation proposals, with submissions open until December 27, 2024.
Proponents argue that tokenisation could revolutionise asset management by streamlining operations and reducing inefficiencies.
Nevertheless, the Bank of Russia maintains a cautious stance, emphasising the importance of a robust legal and regulatory framework to ensure safe implementation.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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