Russia’s lower house, the State Duma, is set to accelerate deliberations on its draft crypto laws in the coming days. From assessing annual limits on retail crypto purchases and set qualification limits on investors to ensure they are financially healthy enough to tap into the crypto market despite the volatility.
Ivan Chebeskov, the Deputy Finance Minister of Russia, has reportedly said that the next two weeks will be crucial in giving a formative direction to the national crypto regulations.
The first draft crypto bill was readied by the Russian government in April. The document proposes an annual limit imposition of 300,000 ruble ($3,800) on retail crypto purchases. In addition, the rules are looking to categorize cryptocurrencies as property — allowing specially licensed platforms to offer related services.
If the proposed law is passed as is, then exchanges, brokers, custodians, and other crypto-related intermediaries would largely fall under the jurisdiction of the Bank of Russia. Corporates, under the proposed bill, will be allowed to use crypto assets for cross-border trading and transactions.
Despite a rather progressive approach on crypto, Russia is not looking to make any crypto asset a legitimate mode of payment alongside the ruble. As of now, El Salvador remains the only country in the world that recognizes Bitcoin as an official legal tender alongside the USD.
The first reading of the bill was completed on April 21. The second and third readings, which will focus on perhaps introducing amendments to the propsal and finalizing the crypto rules, will reportedly commence in Russia’s State Duma on July 21.
For Russia, this push to regulate crypto and integrate with its existing financial systems comes as sanctions imposed by nations like the U.S. obstruct free flow of capital in and out of the country. Amid its ongoing war with Ukraine, which started in 2022, Russians faces several international sanctions preventing them to move funds around internationally.
The country, which is also in the advanced phases of its digital ruble CBDC trials, is trying to tap financial routes that can reduce its dependency on the USD and other forms of western transaction services. Russian President Vladmir Putin has also repeatedly backed the idea of the BRICS countries having an internal onchain settlement systems to let them process transactions in their respective CBDCs and keep the USD aside.
As Russia forges ahead on deeper crypto integration, it plans to treat unlicensed crypto service providers and those found participating in illegal financial activities using crypto as criminals with prison sentences of upto four years and hefty penalties, the bill says.
The country will also be defining its crypto-related data localization rules to make sure that foreign exchanges do not hold the sensitive financial information of Russian nations outside of the country borders. Exchange that would fail to comply with the proposed mandates could lose their licenses and be blocked from the country.
At present, the U.S. and the European Union, and the UAE are among the most comprehensively regulated crypto regions in the world. Other regions like South Korea, Japan, and Latin America are also working to curate their own laws to oversee the digital assets ecosystem.
