Putin Enacts Russia's Initial Cryptocurrency Legislation: Trading Permitted, Payments Still Prohibited

Summary

• President Vladimir Putin has signed into law a comprehensive regulatory framework for cryptocurrency exchanges and related activities in Russia.
• Starting July 1, 2027, only firms on a government registry can operate exchanges, with a minimum capital requirement of 15 million rubles ($187,000).
• Cryptocurrency usage for payments remains prohibited, and banks can block transactions linked to unregistered entities.

In a significant move for the digital currency landscape, Russian President Vladimir Putin has enacted the country’s first extensive legislation governing cryptocurrencies. The new law, reported by Tass, outlines rules for the issuance, storage, accounting, and trading of cryptocurrencies, creating a structured environment for exchanges, custodians, brokers, and clearing institutions.

However, the law does not fully liberalize the market. It explicitly bans the use of cryptocurrencies for purchasing goods and services and limits advertising related to crypto payments. While cryptocurrency mining was legalized in 2024 under a separate bill, this legislation fills the gap concerning trading and custody regulations.

Market Structure Regulations

Under the new law, only companies registered in a special government registry will be permitted to operate cryptocurrency exchanges. Existing exchanges must register by July 1, 2027, and must have a minimum capital of 15 million rubles (around $187,000) while joining a self-regulatory organization within the financial sector. Trading will be allowed for firms that achieve over 3.5 million rubles in monthly transactions. Banks are mandated to block transfers suspected of involving unregistered entities.

Access for retail investors is heavily regulated. Non-accredited investors may purchase certain approved cryptocurrencies through licensed intermediaries, limited to 300,000 rubles per year. All investors, whether retail or qualified, must demonstrate a certain level of knowledge, although qualified investors face no restrictions on purchases.

Legal protection for cryptocurrency holders is also established, regardless of whether their assets were declared previously. Most provisions of the law will take effect on September 1, coinciding with the anticipated rollout of the digital ruble initiative, as stated by the central bank’s governor.

International Implications

The legislation has broader implications, allowing settlements for foreign trade contracts involving both residents and non-residents, as well as transactions related to mined coins. This aspect may draw scrutiny from Western regulators, especially as Russia has been leveraging cryptocurrencies for cross-border trade amid mounting sanctions.

This new legal framework provides Russian cryptocurrency holders with a previously unavailable licensed platform and enhances government oversight through the central bank’s supervision.