The Russian government is set to roll out a new “crypto ban” as early as September 1, which will prohibit the organization of the circulation of cryptocurrencies in the country. Only digital financial assets issued in Russian jurisdictions will be exempt from this ban, including bank-issued blockchain-powered digital coins and the Central Bank’s digital ruble project. The bill is expected to receive little opposition in the State Duma as long as it has the support of the Central Bank and government ministries. While the bank has previously called for a total ban on crypto, the new bill is seen as a compromise that allows for some exemptions.
The new bill will make exceptions for miners, mining pools, and test projects supervised by the Central Bank. These entities will be allowed to continue their operations, while all other transactions involving cryptocurrencies will be prohibited. The Central Bank is seeking to bring all firms using crypto under its influence, with Governor Elvira Nabiullina emphasizing that only the Russian ruble should be considered a legal monetary unit. The bill aims to address concerns that cryptocurrencies are becoming a quasi-currency replacing the ruble in the country.
Russian crypto users could face challenges as the bill might include clauses requiring banks to refuse crypto exchange-related transactions. This would impact the millions of Russian crypto users living in the country. It is unclear if the bill will prohibit the circulation of cryptocurrencies entirely, or only the organization of circulation. Deputy Chairman Anton Gorelkin stated that the law is aimed at cracking down on illegal crypto exchanges operating outside the Central Bank’s new experimental legal regime. The ban is seen as a protectionist measure, intended to shield businesses from Western sanctions.
The proposed ban on organizing the circulation of cryptoassets is a response to concerns about insufficient regulation of virtual assets and cryptocurrencies in Russia. The government is under pressure to address these issues after the Financial Action Task Force downgraded Russia’s compliance rating. Rosfinmonitoring, the top Russian anti-money laundering regulator, is closely monitoring domestic crypto users and has called for the swift rollout of crypto regulations. The ban is seen as a protectionist measure that could be subject to future revisions, with the possibility of exemptions for specific sectors such as industrial crypto miners.
The bill is expected to pass in the State Duma with the support of the Central Bank and government ministries, despite some opposition from lawmakers. The ban on organizing the circulation of cryptocurrencies will impact Russian crypto users and businesses, with exceptions made for miners and other entities supervised by the Central Bank. The government aims to prevent cryptocurrencies from replacing the ruble as the country’s legal monetary unit, while also addressing concerns about insufficient regulation of virtual assets. The ban is also seen as a response to Western sanctions, with the government seeking to protect businesses from economic pressure.
