Summary

  • President Vladimir Putin has enacted the first law in Russia providing detailed regulations for cryptocurrency exchanges, custodians, brokers, and mining activities.
  • From July 1, 2027, only firms listed in a state registry can operate exchanges, with a required minimum capital of 15 million rubles ($187,000) and the establishment of a self-regulatory organization.
  • Cryptocurrencies cannot be used for payments, and banks are authorized to block transactions suspected of being linked to unregistered entities.

On Tuesday, Russian President Vladimir Putin signed into law the nation's first comprehensive framework for digital currencies, as reported by the state news agency Tass. This legislation outlines the regulations for the issuance, storage, accounting, and trading of cryptocurrencies, integrating exchanges, digital custodians, brokers, and clearing institutions into a unified system.

However, the market is not entirely open. The law maintains a prohibition on using cryptocurrencies and digital rights as payment for goods and services, and it restricts advertising related to crypto payments. Cryptocurrency mining was already legalized in 2024 when Putin approved a separate bill, so this new law addresses the trading and custody aspects that the mining legislation did not cover.

Establishing the Market Structure

Only firms listed on a special government registry will be allowed to operate crypto exchanges, with existing operators given a grace period to register by July 1, 2027. Registered exchanges must hold a minimum capital of 15 million rubles (approximately $187,000) and must join a self-regulatory body within the financial sector.

Trading activities will commence for firms that exceed 3.5 million rubles in monthly transactions. Banks and branches of foreign lenders are required to deny any transfers they suspect are associated with unregistered providers.

Access for retail investors is restricted and regulated. Non-accredited investors can purchase certain liquid cryptocurrencies (a list to be specified) through licensed intermediaries, with a limit of 300,000 rubles per year per intermediary. Both retail and qualified investors must pass a knowledge assessment, while qualified investors face no purchase restrictions.

The law also ensures legal protection for cryptocurrency holders, regardless of whether their assets were previously declared.

Most provisions will come into effect on September 1. As noted by Decrypt during the bill's progression, the distinction between "buying crypto" and "using crypto" was central to the law's intent—Russia aims to create a regulated framework rather than a parallel currency system. This regulatory structure aligns with the upcoming digital ruble initiative, which the central bank's governor stated must be supported by the same September 1 deadline.

Implications for Sanctions

The law's provisions are particularly significant beyond Russia's borders. It permits settlements under foreign trade contracts involving both residents and non-residents, as well as transactions involving mined coins and payments made within digital asset platforms. This exception is likely to attract the scrutiny of Western regulators, as Russia has utilized cryptocurrency for cross-border trade in response to increasing sanctions pressure.

This legislation provides Russian cryptocurrency holders with a legal framework and a licensed platform that previously did not exist. Additionally, it offers the government a centralized system under the supervision of the central bank, allowing for greater oversight.