Russia moves to formalise cryptocurrency market with new legislation

Russia has introduced a package of bills in the State Duma aimed at bringing cryptocurrency activity under a clear legal framework.

The proposed laws seek to regulate digital asset transactions that have long operated in a legal grey area across the country.

Lawmakers are working to define cryptocurrencies and digital financial assets, outlining how they can function as both payment tools and investment instruments.

The legislation also proposes amendments to existing laws to remove conflicts and create a consistent regulatory structure for crypto use.

Authorities plan to establish clear responsibilities and penalties for individuals and entities that fail to comply with the new rules.

Under the proposal, crypto transactions conducted without regulated intermediaries will be prohibited within Russia.

However, Russian residents will still be allowed to purchase cryptocurrencies abroad under specific conditions.

Transactions involving digital assets outside the country must go through recognised and regulated intermediaries to remain compliant.

The bills introduce a spending cap for non-qualified investors, limiting purchases to 300,000 rubles annually through a single intermediary after passing a test set by the Bank of Russia.

Qualified investors will not face any limits on their cryptocurrency purchases, giving them broader access to the market.

The framework also places new reporting obligations on residents who hold or transact digital assets outside Russia.

Individuals will need to inform tax authorities when opening or closing crypto wallets abroad and must disclose relevant transactions.

Failure to comply with these reporting requirements could lead to administrative penalties and enforcement actions.

Operating unregistered crypto exchanges or facilitating illegal transactions with non-qualified investors could result in fines and disqualification from operating for up to two years.

The government aims to strengthen oversight while encouraging the development of a domestic crypto ecosystem.

"These regulations will create Russia’s own infrastructure for the circulation of digital currencies, allowing everyday citizens to trade and store crypto in local platforms and custody providers, and will also curb anonymous and illegal crypto transactions and reduce tax evasion using digital assets,"

Mikhail Mishustin said.

Officials believe the measures will reduce illicit financial activity and improve transparency across the sector.

Market participants expect the new rules to reshape the local crypto landscape significantly.

"Many crypto exchanges in Russia today will be unable to meet the legalisation requirements and will close,"

Alexey Korolenko said.

Industry observers suggest that stricter compliance standards could lead to consolidation, with only well-resourced platforms able to continue operating.