Russia Approves Extensive Cryptocurrency Rules, Authorizes International Transactions, and Enhances Market Oversight

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Russia’s lower house of parliament, the State Duma, has moved forward with a comprehensive bill to govern digital currencies, signifying a major stride towards formal supervision of the nation’s crypto landscape.

Lawmakers gave their assent to the draft legislation in its initial reading, with 327 out of 340 deputies casting affirmative votes. The proposed law, designated “On Digital Currency and Digital Rights,” was presented by the Russian government and establishes an extensive framework dictating the issuance, trading, and safekeeping of cryptocurrencies.

Should this legislation be enacted, it is slated to become effective on July 1, 2026, although certain clauses are designated for later implementation.

The proposal delineates crucial legal definitions, including the “circulation of digital currency” and the “organization of digital rights circulation,” while specifying the entities authorized to participate in the market. It categorizes regulated participants into five distinct groups: exchanges, brokers, management companies, depositories, and exchangers. All these entities will be required to secure licenses and operate under the oversight of the Bank of Russia.

The central bank will be empowered to authorize, regulate, and supervise these entities, possessing the authority to enforce transaction caps and compliance mandates.

Crypto is property

A pivotal aspect of the bill is its designation of digital currency as property. This reclassification permits crypto assets to be acknowledged in legal proceedings, encompassing situations like bankruptcy and divorce settlements.

Concurrently, the legislation upholds a strict prohibition on utilizing cryptocurrency for domestic transactions. The Russian ruble remains the exclusive legal tender within the country. Nevertheless, the bill permits the use of digital currencies in international trade, providing businesses with a potential avenue for cross-border settlements.

Advocates contend that this clause could assist Russian enterprises in navigating sanctions by facilitating transactions with international partners outside of conventional financial channels.

The bill also introduces a tiered system for investors. Those identified as qualified investors will encounter fewer restrictions, whereas non-qualified participants will need to pass assessments and may be subject to annual ceilings on their crypto acquisitions. Lawmakers assert that this structure is intended to mitigate risk exposure for individual investors.

Access to cryptocurrency markets will be confined to licensed intermediaries. Direct dealings without such intermediaries are slated for more stringent controls, with a broader prohibition scheduled to take effect in 2027. Until then, peer-to-peer transactions continue to be lawful, although enforcement measures, such as payment blocking and blacklisting protocols, are anticipated to commence earlier.

The legislation further outlines protocols for the custody of digital assets. A new digital depository system will be established to manage crypto holdings, imposing limitations on transfers to personal wallets and restrictions on withdrawals to authorized foreign entities.

Mining operations are also addressed within this framework, mandating the utilization of Russian infrastructure and the formal accounting of extracted assets.

Notwithstanding the substantial backing in the initial reading, certain legislators and committees have requested modifications. The State Duma Committee on Competition Protection has cautioned that excessive regulatory measures could impede market expansion, while the Committee on Financial Markets has called for enhanced clarity regarding non-custodial wallets and more robust legal protections for privately held assets.

The bill requires approval in two further readings within the State Duma before progressing to the Federation Council and subsequently to the president for endorsement. Amendments for the second reading are due within the next fortnight.

Based on materials from : bitcoinmagazine.com