Behind Russia’s Controversial Bill That Aims to Ban Cryptocurrencies

Amid rising geopolitical tensions and sanctions, Russia is reportedly preparing to enact a strict ban on the widespread trading of cryptocurrency assets like Bitcoin, allowing only digital financial assets to be issued within its own jurisdiction.

This move is part of a broader government effort to regulate the cryptocurrency ecosystem. Only miners and projects approved by the Central Bank will be granted the right to operate. However, a lawmaker has clarified that establishing crypto exchanges and over-the-counter (OTC) services outside the experimental legal framework will be prohibited.

Russian Lawmaker Clarifies

Following the development, Anton Gorelkin, Chairman of the State Duma Committee on the Financial Market, attempted to clarify that he does not support a complete ban on cryptocurrency circulation in Russia.

In a Telegram post, he explained that this restriction is not intended to ban all cryptocurrency usage but rather to regulate the establishment of platforms for cryptocurrency exchange within Russia’s legal framework.

Gorelkin also suggests that setting up of a legal Russian crypto infrastructure is influenced by geopolitical realities. This entails considerations related to international relations. He went on to add that allowing such infrastructure could expose Russian businesses to Western sanctions.

Additionally, Gorelkin also noted that the restriction might be lifted in the future, stating that users are still able to use foreign crypto exchanges and OTC services as they did before. However, the impact on many OTC crypto services in Moscow is uncertain.

Uncertainty

Gorelkin’s latest post does not clarify the Chairman of the State Duma Committee on the Financial Market Anatoly Aksakov’s statement that the controversial bill intends to limit non-Russian crypto operations to strengthen the dominance of the ruble.

Aksakov previously mentioned that the bill would create exemptions for crypto miners and Central Bank-backed pilot projects under a trial legal framework, given that crypto mining contributes significantly to Russia’s tax income.

Meanwhile, Russia’s Finance Minister, Anton Siluanov, has advocated for a more balanced approach and instead pushed for regulation that allows the use of cryptocurrencies in both domestic and international transactions.