Central Bank of Russia sets rules for margin trading in cryptocurrency

MOSCOW. July 30 (Interfax) - The Bank Central of Russia has prepared a draft regulation that allows brokers to accept cryptocurrencies and digital rights as collateral for margin positions, and their clients to engage in short selling, subject to certain requirements, and the corresponding regulation is posted on the regulator's website.

Both qualified and non-qualified investors will be able to enter into margin transactions. For the latter, cryptocurrency transactions will be limited to limits established by the Central Bank.

The regulation also amends the procedure for calculating risk coverage standards for margin transactions. Brokers currently calculate them for transactions involving securities, precious metals, currencies, futures, and options. Cryptocurrencies and digital rights will be added to the list.

"The regulations demonstrate the safety margin of an investor's portfolio. They define the limits within which a broker can execute client transactions using borrowed funds, as well as the limits beyond which the client's positions will be forcibly closed. This will help limit the amount of investor losses," the Central Bank noted.

The regulation is scheduled to take effect 10 days after its official publication. Suggestions and comments on the draft are accepted until August 12.

The Central Bank earlier this week also published draft regulations defining the rules for cryptocurrency trading and requirements for digital depositories.