- The country’s authorities agreed to recognize crypto assets as currency, although their use and trading will be regulated.
- The decision comes less than a month after Russian officials proposed banning cryptocurrencies in the country.
In what can best be described as a reversal, Russian authorities have formally agreed to treat cryptocurrencies as currency. Reports from local media detail that the government will work with the Bank of Russia to draft legislation defining the use of these assets.
Multiple agencies reportedly took part in the discussions leading to this decision, including the Ministry of Finance, the Federal Tax Service, the Federal Security Service, and the Ministry of Internal Affairs.
The Russian central bank retreats from its proposal
The move to adopt and carefully regulate these assets is surprising, given that the country’s central bank had recently pushed to ban cryptocurrencies entirely. Although President Vladimir Putin intervened and advocated for a less strict approach, few expected such a marked change in tone.
The legislation is expected to be drafted and finalized before February 18, with implementation aimed at protecting the nation’s financial system from threats posed by digital assets. Through this measure, Russia intends to integrate cryptocurrencies in a manner that safeguards financial stability.
Cryptocurrencies will no longer be classified as purely digital financial assets but as an “analogue of currencies,” according to reports. A section of a draft document published states that the regulations will facilitate the incorporation of cryptocurrencies into the existing financial system without harming traditional finance.
Rules set to manage crypto usage
Russian residents will be permitted to use, hold, and even trade crypto assets under strict compliance with specified rules. For example, users must complete identity checks through the banking system or approved intermediaries. Crypto transactions involving amounts greater than R 600,000 must be reported.
Acting outside these rules—such as illegally accepting cryptocurrencies as payment—is strongly discouraged and will result in fines. Crypto service providers will also be required to meet specific requirements designed to protect investors.
There are also plans to enforce guidelines that mandate parties in the crypto sector to provide users with clear information about the risks associated with cryptocurrencies.
Analysts predict this decision will have a net positive influence on the crypto market. However, at the time of writing, the bullish impact has not yet been reflected among major cryptocurrencies. Bitcoin remains just above $44,100 while Ethereum trades around $3,195.