The Bank of Russia has proposed establishing a controlled framework for cryptocurrency investments under a three-year experimental legal regime.
Main Provisions of the Initiative
The initiative, developed in response to directives from the Russian president, aims to allow a select group of investors to trade digital assets under strict regulations. According to the proposal, only 'particularly qualified' investors will be eligible to participate. These individuals must either have investments exceeding 100 million rubles in securities and deposits or an annual income above 50 million rubles. The plan, announced on March 12, is designed to introduce regulatory oversight and transparency into Russia’s cryptocurrency market while mitigating risks associated with digital assets.
Limits on Domestic Crypto Transactions
Despite maintaining its stance against the use of cryptocurrency for domestic transactions, the Bank of Russia has been exploring ways to integrate digital assets into cross-border trade since 2022. In December 2024, Finance Minister Anton Siluanov confirmed that Russia had been conducting crypto-based foreign trade transactions under an existing ELR introduced in September 2024. The latest proposal is intended to establish standards for crypto asset service providers and broaden investment opportunities for experienced investors. However, the Bank of Russia continues to warn about the volatility of cryptocurrencies and their lack of backing from any jurisdiction, reinforcing its position that digital assets are not recognized as legal tender. Under the proposed framework, cryptocurrency transactions between Russian residents outside the ELR would be prohibited, with penalties imposed for violations.
Future Prospects and Warnings
Under the proposed framework, qualified investors may invest in securities, derivatives, and digital financial assets tied to cryptocurrency prices, but direct transfers of digital assets would remain restricted. The Bank of Russia intends to maintain a cautious approach to regulation and inform market participants about potential risks.
The Bank of Russia's proposal for an experimental legal regime for cryptocurrency investments seeks to create a controlled environment for trading digital assets while reducing risks and ensuring market transparency.
