Russia’s Crypto Regulatory Big Turnaround: Compliance Market Reopens, Ordinary Investors Face Another “Wall”

Author: Zen, PANews

Russia has finally opened a door for cryptocurrency trading at home, but behind that door is not a free market—rather, it is a compliance corridor with layers of checkpoints.

On July 21, the Russian State Duma passed the second and third readings of the “Digital Currency and Digital Rights” bill on the same day, establishing a basic framework for building a lawful domestic crypto trading market.

Before the bill went to the second and third readings, multiple proposals aimed at easing restrictions were repeatedly rejected—especially proposals concerning trading limits for ordinary investors and the range of assets they can buy. Instead of lowering the threshold, the gate was further sealed shut.

At the same time, stablecoins were placed under another set of usage logic, forming a more strategic “dual standard”: strict limits on investment purposes for offshore stablecoins such as USDT and USDC, while keeping a more flexible window for use in foreign trade settlement.

These changes in regulatory legislation show a clear policy mainline: from blocking, to conditional acceptance, and then to refined, tiered supervision.

What is being opened is not a freely circulating crypto economy, but a controlled market designed to serve investment management and cross-border settlement needs.

To understand why Russia is opening the market while also erecting high walls for ordinary investors, it is necessary to look back at the changes in recent years driven by both geopolitical pressure and domestic regulatory policy.

Policy sudden turn: from limited approvals to building a compliant market

Russia’s true shift in attitude toward cryptocurrencies began with real pressure under geopolitical constraints.

In 2024, as traditional cross-border payment channels were impacted by sanctions, Russia’s stance on cryptocurrencies began to shift noticeably toward pragmatism. In addition to pushing legislation to regulate crypto mining, Russia also began to allow companies, under experimental legal frameworks led by the central bank, to use digital currencies such as Bitcoin for foreign trade settlement.

However, this “two-track policy” was far from ordinary investors. Until March 2025, the new方案 proposed by the Russian government started to try to establish formal entry channels for domestic crypto investors. The policy focus had moved from prevention and restrictions to building a compliant trading market under strict regulation.

At that time, the Bank of Russia proposed to the government to establish an experimental legal framework for three years, allowing “specially qualified investors” to trade cryptocurrencies. This status would only be available to a tiny number of high-net-worth investors—individuals needed to hold securities and deposits worth more than 100 million rubles (about $1.28 million), or have income exceeding 50 million rubles (about $640k) in the previous year.

By December 2025, the Bank of Russia expanded the regulatory scope from a small pilot group into a normalized market. It abandoned the initial approach that allowed only “specially qualified investors” to participate, and for the first time explicitly included ordinary investors by dividing investors into two categories. Ordinary investors classified as “non-qualified investors” had to pass risk testing, could only buy a small number of crypto assets meeting liquidity standards, and were subject to annual quota limits. Those classified as “qualified investors” could purchase any cryptocurrencies other than privacy coins, with no additional annual monetary cap. According to the central bank’s estimates, the number of compliant investors in Russia is around 1 million.

In addition, the Bank of Russia also abandoned the plan of running experiments for several years first, and then making permanent rules. Instead, it pushed for direct legislation.

In April 2026, the Russian government submitted the “Digital Currency and Digital Rights” bill, and on April 21 it passed its first reading in the State Duma. The bill aimed to establish a set of domestic infrastructure licensed or registered by the central bank, including crypto exchange operators, brokers, trust management institutions, and digital asset custodians. In foreign trade contracts, companies and individual entrepreneurs were also allowed to use cryptocurrencies for settlement.

The bill also provides that certain cryptocurrencies may enter public trading markets, but the entry thresholds for crypto assets are extremely high: they must simultaneously meet conditions such as an average market capitalization exceeding 5 trillion rubles (about $63.8 billion) over the past two years, daily average trading volume exceeding 1 trillion rubles (about $12.8 billion), and having at least five years of price records on an overseas licensed trading venue. In practice, this basically means only Bitcoin and Ethereum can meet those standards.

It can be seen that Russia’s “legalization” of cryptocurrencies, while always accompanied by strict conditions, is overall moving toward a more relaxed regulatory direction. However, when the bill is about to be submitted to the State Duma on July 21 and enters the critical second reading, this easing trend has already come to an abrupt stop.

At present, the bill will take effect once it passes the Federal Council and is signed by the president. As specified in the bill, major provisions are planned to take effect from September 1, 2026. Crypto trading service providers will receive about a one-year transition period to continue operations until July 1, 2027 without being included in the central bank’s registered roster.

The final version keeps the “high wall”: a per-platform trading limit of about $3,800

Before the second and third readings, the Duma’s Committee on Financial Markets reviewed a batch of amendments intended to relax cryptocurrency trading restrictions. But the version finally passed basically maintained the committee’s cautious stance, with no obvious easing of purchase quotas for ordinary investors or entry thresholds for public trading assets.

Among the proposals vetoed by the Financial Committee, the one that drew the most attention was to raise the annual crypto purchase quota for non-qualified investors through a single intermediary from 300k rubles (about $3,800) to 600k rubles (about $7,700). The committee had no intention of expanding investment size for ordinary residents, and recommended maintaining the original standards. Committee Chair Anatoly Aksakov said this would protect inexperienced investors from the risk of suffering huge losses caused by high-volatility markets.

Chair of the Russian State Duma Committee on Financial Markets Anatoly Aksakov

Notably, the bill uses the wording “not more than 300k rubles per year through each intermediary,” rather than aggregating an investor’s purchase amounts across all platforms within Russia. Therefore, based on the literal meaning of the currently released terms, the quota is calculated separately for different intermediaries. Anatoly Aksakov, chair of the Duma’s Financial Markets Committee, said that setting quotas is intended to reduce the risk that inexperienced investors will suffer major losses in high-volatility markets.

Meanwhile, the threshold for cryptocurrencies eligible for public trading markets also was not lowered. In the original version, standards for “legal” cryptocurrencies—such as market capitalization and daily trading volume—were extremely strict, with only a very small number of top crypto assets like Bitcoin and Ethereum permitted to enter the Russian market. There had been lawmakers proposing to lower the market-cap threshold to 1 trillion rubles (about $12.8 billion) and reduce daily average trading volume to 100 billion rubles (about $1.28 billion), but this did not receive support. That means most altcoins remain excluded from Russia’s compliant trading market.

However, the final version made some concessions for non-custodial wallets. Investors can transfer cryptocurrencies to external wallets not managed by Russian digital asset depositories and where the individual holds the private key. But for external transfers exceeding 100k rubles (about $1,277), the digital depository must set a 48-hour “cooling-off” period, executing the operation two days after receiving the customer’s instruction.

This arrangement differs clearly from the first-reading version. Under the first-reading approach, crypto assets would generally need to remain within Russia or within qualifying foreign custody systems, leaving very limited space for the use of personal wallets. The final bill did not completely close the non-custodial pathway, but by adding a cooling-off period, identity verification, and transaction monitoring, outbound transfers would still be subject to relatively strong anti-fraud controls.

As for user asset protection, the bill remains controversial. Previously, an amendment proposed that digital asset depositories should purchase mandatory liability insurance to cover customer losses caused by hacker attacks, technical failures, or the illegal use of keys. That requirement did not make it into the final version. Under the current institutional design, liability insurance is not a generally mandatory obligation for digital asset depositories; protection for customer losses relies mainly on the institution’s capital, information security systems, and specific contractual arrangements.

Therefore, in the current version, on one hand it grants digital asset depositories stronger control over transactions, but on the other hand it does not require them to assume corresponding obligations. They do not need to fully bear the relevant technical and custody risks, leaving an obvious shortcoming in protecting users’ funds.

Draw the stablecoin boundary: investment tightened, but foreign trade uses preserved

Compared with the continuity in investor eligibility and protection mechanisms, the second-reading draft of the “Digital Currency and Digital Rights” bill made a more substantive change by separately categorizing offshore stablecoins and adding corresponding admission rules.

In the first-reading bill, the definition of “digital currency” emphasized that there is no entity behind the asset that assumes obligations to the holder. This definition applies to decentralized assets such as Bitcoin, but excludes stablecoins such as USDT and USDC. Because centralized entities like Tether and Circle assume responsibilities related to reserve management, value maintenance, and redemptions.

Therefore, the second-reading amendment introduced concepts such as “foreign digital instruments” and “non-deliverable foreign digital instruments,” attempting to separate offshore fiat-reserve stablecoins from general cryptocurrencies.

Under the final version that was passed, qualified investors can buy foreign digital instruments through Russian licensed infrastructure, including offshore stablecoins that meet the relevant definitions. Non-qualified investors are, in principle, not allowed to freely buy stablecoins; they can do so only if the Bank of Russia lists a particular foreign stablecoin in an approved public trading assets list, and they must also comply with the 300k ruble quota limit.

In foreign trade contract settlement scenarios, stablecoin usage restrictions are noticeably loosened and no longer apply the investor admission requirements described above. Russian companies and individual entrepreneurs participating in foreign economic activities can use all types of cryptocurrencies, stablecoins, and different types of wallets to settle with offshore counterparties.

In other words, Russia is not completely banning USDT and USDC; it is preparing to primarily restrict their investment uses to the qualified investor group, while keeping a more permissive entry point for cross-border trade.

This arrangement reflects Russia’s complicated attitude toward stablecoins.

On one hand, the Bank of Russia acknowledges that stablecoins can shorten cross-border settlement time and reduce intermediary costs; on the other hand, offshore issuers can also freeze or seize tokens. Russian companies and users therefore also face sanctions, reserve asset and issuer credit risks.

Heavy penalties for unlicensed crypto operations, P2P gray area still unclear

To force trading activities to shift toward a licensed system, Russia is also preparing to introduce criminal liability for the illegal circulation of crypto assets by unlicensed organizations.

The accompanying bill plans to add Article 171.7 to the Criminal Code: anyone who provides services for crypto asset custody, buying and selling, crypto-to-crypto exchange, or transfers without a license from the Bank of Russia, and obtains income exceeding 3.5 million rubles (about $45k), or causes major losses of an equivalent scale, could face a fine of 100k to 300k rubles (about $1,300 to $3,800), compulsory labor for up to four years, or imprisonment for up to four years, with an additional possible fine of up to 80k rubles (about $1,000).

If the conduct is carried out by an organized group, or if income and losses exceed 13.5 million rubles (about $172k), the maximum prison term could be increased to seven years, along with a fine of up to 1 million rubles (about $12.8k). The bill originally planned to take effect from July 1, 2027.

However, the above criminal liabilities are part of another accompanying bill, which was not passed together with the “Digital Currency and Digital Rights” bill. Earlier, Anatoly Aksakov, chair of the Duma’s Committee on Financial Markets, said that the second and third readings of the accompanying criminal-liability bill would be handled by the new Duma after elections, and the specific punishment clauses still needed further refinement.

His remarks show that Russia’s direction in cracking down on unlicensed commercial intermediaries is not controversial. The real difficulty is how to distinguish between ongoing illegal exchange businesses, sporadic trades between individuals, and normal holding and transferring of crypto assets.

Under the current regulatory logic, residents in the future would in principle need to carry out crypto buying and selling through institutions that are registered or licensed by the central bank, which could conflict with direct P2P trading. But Aksakov also denied that ordinary P2P users would naturally fall within the scope of criminal penalties, and said clauses involving natural persons are still under discussion.

It is relatively easy to set up licensed exchanges and custody institutions, but Russia has long had a large-scale over-the-counter exchange business, Telegram trading, and personal P2P networks. If the asset range in compliant channels is too narrow, costs too high, or quotas too low, ordinary users may not be willing to migrate into compliant systems. Conversely, if the scope of criminal liability is drawn too broadly, occasional crypto trades between individuals could also be swept into the crackdown on unlicensed operations.

These seemingly contradictory statements indicate that the final criminal liabilities will likely target unlicensed exchangers running ongoing operations, charging remuneration, and meeting the “significant income” standard, while the legal boundary for transactions between individuals has not yet been made clear enough in the text. This is also the last—and the most difficult—piece to solve in Russia’s crypto regulatory framework.

The main bill passed on July 21 basically confirmed the institutional outline of Russia’s crypto market. The main regulatory uncertainties in that country have shifted from drafting the system to how it will be implemented. What matters in the next phase is which assets the central bank will include in the list for ordinary investors, how non-custodial wallet transfers will be carried out, whether licensed institutions can build sufficiently convenient services, and how the accompanying criminal-liability rules ultimately define the boundary between individual P2P trading and illegal operations.