Summary
- The State Duma is set to hold its second and third readings of a significant crypto bill on July 21; if passed, the law will be enacted on September 1.
- It allows cryptocurrency use solely for international transactions, providing a legal avenue for Russian businesses to process payments beyond Western banking systems.
- However, the use of cryptocurrency for domestic payments remains prohibited.
The State Duma, which is the lower chamber of Russia's parliament, is approaching the final voting stages for the nation's first all-encompassing cryptocurrency law on Tuesday.
This bill, known as "On Digital Currency and Digital Rights", must still receive approval from the Senate and the signature of President Vladimir Putin, a process that Anatoly Aksakov, the head of the State Duma Committee on Financial Markets, anticipates will take around two additional weeks. Should it pass, the law would come into effect on September 1.
The initial deadline was set for July 1, but delays arose from coordination issues among various government departments, as reported by the Russian news outlet Kommersant.
Provisions of the New Legislation
The proposed law introduces a licensing framework—a system for government-issued permits—for cryptocurrency exchanges, brokers, and custodians (businesses that manage cryptocurrency on behalf of users, similar to banks holding cash). The Bank of Russia will oversee the issuance of these permits and has the authority to exclude any cryptocurrency that it considers a risk to financial stability.
Major financial institutions are already taking action: VTB and T-Bank have revealed plans to establish crypto depositories.
Not all cryptocurrencies meet the criteria for legal trading. To be traded in Russia, a cryptocurrency must have a market capitalization exceeding 5 trillion rubles (approximately $65 billion) and a verified trading history of at least five years on a licensed foreign exchange.
Currently, this limitation applies to just two currencies: Bitcoin and Ethereum. Alexandra Fedotova, a lawyer at White Stone monitoring the legislation, informed the Russian publication Parlamentskaya Gazeta that the Bank of Russia is expected to publish a list of the top five or ten most actively traded cryptocurrencies on recognized exchanges.
"These will certainly include BTC and ETH," she stated. "It’s possible that SOL or TON may be included due to their popularity in Russia. Other currencies are restricted to qualified investors only."
General investors—those without professional qualifications—are limited to an annual purchase ceiling of 300,000 rubles (around $3,800) through a single licensed intermediary. In contrast, professional investors face no such restrictions, although they too are barred from purchasing privacy coins (cryptocurrencies designed to obscure transaction information and wallet addresses). Coins like Monero (XMR), Zcash (ZEC), and Dash are completely excluded.
"The CBR explicitly states: you cannot purchase coins that conceal the recipients," Fedotova remarked. "If you can't create a transaction graph to trace the origin of the funds, such an asset won't pass AML verification," referring to the anti-money laundering checks required for transactions under the new regulations.
Restrictions on Crypto Usage
For those in Russia hoping to use cryptocurrencies, the new legislation is likely disappointing: Purchasing goods with crypto within Russia remains prohibited.
The law allows cryptocurrency only for international transactions—enabling Russian firms to pay foreign partners with Bitcoin to navigate around Western banking systems. The ruble continues to be the sole legal currency for transactions within the country.
Kaplan Panesh, deputy chair of the State Duma's Budget and Taxes Committee, clarified during the bill's first reading in April that the legislation was crafted with the intention of safeguarding the Russian ruble: "This enables Russian companies to utilize cryptocurrency for payments to foreign partners, thereby bypassing sanctions limitations."
Since 2014, Russia has faced Western sanctions, which intensified following its invasion of Ukraine in 2022. The EU took action in February to prohibit all cryptocurrency dealings with Russian entities, yet Moscow continues to pursue its legislative agenda.
In August 2024, Putin signed a law regulating crypto mining, positioning Russia as the second-largest Bitcoin producer globally after the United States, according to the Hashrate Index, 2026. This new bill adds trading and settlement regulations, completing the regulatory framework that Moscow has been developing since the onset of the first sanctions.
Unregulated platforms will face an outright ban starting July 1, 2027.