Over the years, Russia has sent conflicting signals about its relationship with cryptocurrencies. Recently, the Kremlin seems to have started accepting crypto. Is that actually the case?
Early crypto regulations in Russia
Until the 2020s, cryptocurrency effectively existed in a gray area in Russia. In July 2020, President Vladimir Putin signed a Digital Financial Assets (DFA) regulation that allowed crypto transactions while banning residents from using crypto as a means of payment.
DFAs can be used by banks registered with the Russian central bank, the Bank of Russia. A legal challenge to crypto transactions is only possible if crypto ownership is maintained and the owner declares the transactions.
In February 2022, the Central Bank of Russia published a consultation paper entitled “Cryptocurrencies: Trends, Risks and Regulation”. It mentions Russia’s leading role in mining capacity and the fact that Russians are actively trading cryptocurrencies. Additionally, the paper calls the potential for using crypto for settlements “limited” even in the long term.
According to the bank, cryptocurrencies threaten the well-being of Russians, so ensuring full transparency of crypto transactions is a must. The paper called for banning the creation of cryptocurrencies and crypto exchanges, banning financial institutions from investing in crypto or related assets, and banning mining altogether.
In addition, the central bank called on the government to monitor the activities of Russian citizens on foreign cryptocurrency platforms. The consultation paper mentioned the ongoing development of a digital…
