Russia: Central Bank Proposes $8,000 Limit on Annual Crypto Purchase for Retail Buyers

Russia’s latest crypto regulatory measures involve the capping of annual crypto acquisition for retail investors. The news is the latest salvo in the love-hate relationship between Moscow and the nascent cryptocurrency space.

Central Banks Places Limit on Crypto Ownership for Russians

According to a draft directive issued on Tuesday (Oct. 14, 2020), the Bank of Russia plans to limit the crypto purchasing power of retail buyers. As part of the proposal, unqualified investors will have to abide by a 600,000 rubles (~$8,000) limit on crypto investments per year.

The communique published by Russia’s central bank also expanded the scope of the limit to include all digital financial assets, adding:

“The purpose of the project is to implement the powers of the Bank of Russia on establishing signs of digital financial assets, the acquisition of which can only be carried out by a person who is [a] qualified investor, as well as signs of digital financial assets and the limits of the amount of cash, within which there may be digital financial assets purchased.”

Based on the justification given above, regulators in Moscow are attempting to limit larger-size crypto investments to only accredited and market-savvy investors. The proposed plan will come into force on Jan. 1, 2021. The public has been invited to submit comments and suggestions concerning the planned crypto investment cap policy.

Tuesday’s directive is an extension of the draft laws introduced by the government back in September. As previously reported by BTCManager, part of the new cryptocurrency regulatory regime in the country may see people with crypto holdings above $1,300 having to declare same to the authorities.

The move is part of the government’s efforts to combat virtual currency-related money laundering and other illegal financial activities. Illegal crypto activities will also attract steep punishments like fines and jail terms according to the provisions of the new laws.

Much Ado About Retail Investors

The news also marks another restriction of retail cryptocurrency participation. Earlier in October, the UK Financial Conduct Authority (FCA) finally went through with its planned ban on retail crypto derivatives trading.

Like the regulators in Russia, the FCA argued that ‘mom and pop’ investors lacked the financial sophistication to handle a market like cryptocurrencies. According to the FCA, the volatility of crypto assets means that inexperienced investors can suffer massive losses.

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