A Russian based stock exchange MTCEX is concluding plans for a platform to trade cryptocurrencies. Trading on the exchange will however be limited to qualified investors. Qualified investors are those with either personal assets of 6 million roubles (roughly $100,000) as an individual or 200 million roubles (roughly $3.4 million) as an investment firm. Instruments that will be traded include derivatives and Exchange Traded Funds (ETFs) based on them.
Cryptocurrencies are gradually gaining mainstream acceptance and adoption in the larger financial community.The New York Stock Exchange had in May 2015 introduced a bitcoin price index.
Why Russia was the first to make this move
While many countriess have viewed cryptocurrencies with suspicion, the Russian Government has had a more welcoming attitude. Many prominent players in the crypto world are from Russia, due to the emphasis placed on STEM education. Vitalik Butherin co-founder of Ethereum has met often with Russian President Vladimir Putin, who has given approval for their adoption. A draft law is currently in the works, and will be approved soon.
The Russian Government also believes that by embracing cryptocurrencies it can minimize corruption and illegal transactions that occur using them. The country is currently working on a draft law that will regulate the sector.
Implications of the move
Trade in cryptocurrencies will increase massively, as Russian investors who had been operating informally will be encouraged to trade in the open. Companies in Russia, could also decide to raise capital through Initial Coin Offers. Exchanges in other emerging markets could follow Russia’s example. Even though the entry requirements are steep, the move will increase transactions on the exchange.
The Moscow Stock Exchange was established on the 19th of December 2011 from the merger of the Moscow Interbank Currency Exchange (MICEX) and the Russian Trading System (RTS). The exchange currently trades equities, bonds, derivatives, foreign exchange market, money market and precious metals.