Russia’s central bank is making it easier for individuals to become qualified investors as the country prepares to introduce a regulated cryptocurrency market.
The Bank of Russia will introduce a new qualification route on August 31, allowing individuals to gain qualified investor status by passing an approved financial-market knowledge test. The move could give more people access to higher cryptocurrency purchase limits under Russia’s new crypto framework.
Under the new system, investors can prove their financial knowledge through certificates issued by approved Russian institutions. These include the Qualifin Certificate from the National Finance Association and the MOEX Investor Certificate from the Moscow Exchange. Certificates for financial analysts and investment advisers will also be accepted.
An investor who holds any one of the approved certificates can be recognized as a qualified investor by a broker or management company.
The change adds a knowledge-based option to the existing qualification system. Investors can still qualify through other methods, including meeting certain income or asset requirements, having relevant experience in the securities market, showing independent investment experience or holding a suitable degree.
The central bank said the purpose of the change is not simply to increase the number of qualified investors. Instead, it wants people entering the market to have enough knowledge to understand the risks associated with complex financial products.
This change is particularly important because of the different cryptocurrency limits planned for qualified and non-qualified investors. Under Russia’s new regulated crypto framework, non-qualified investors will be limited to purchasing up to 300,000 rubles ($3,498) worth of approved cryptocurrencies each year through a single regulated intermediary.
Qualified retail investors, however, will have a much higher annual limit of 3 million rubles ($34,984). This means qualified investors will be able to purchase ten times more cryptocurrency than non-qualified investors.
The new qualification rules come as Russia moves closer to implementing its wider cryptocurrency framework. The system will establish rules for crypto exchanges, brokers, custodians and other financial intermediaries, with the Bank of Russia responsible for supervision.
Russian banks are also preparing for the new market. Sberbank plans to develop infrastructure for cryptocurrency trading, custody, settlement and digital depository services. Alfa-Bank has already tested crypto trading through its investment platform with a limited group of qualified investors.
The changes show that Russia is trying to build a controlled cryptocurrency market while limiting risks for less experienced investors. By linking higher investment limits to financial knowledge and qualifications, the central bank hopes to give experienced investors greater access while maintaining safeguards for retail customers.
As the regulated crypto market develops, the new qualification route could become an important way for Russian investors to gain broader access to digital assets.
The proactive way in which Russia is allowing crypto investment within the country is likely to be welcomed by major crypto firms like Riot Blockchain Inc. (NASDAQ: RIOT) around the world as the conditions set aren’t prohibitive and they will allow more people to consider investing in digital assets in a responsible way.
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