Russia’s central bank to allow banks crypto engagement with strict rules

Russia’s central bank is signaling a significant shift in its approach to digital assets, indicating a willingness to permit banking institutions to engage with cryptocurrencies. This development marks a departure from previous conservative stances, driven by a recognition of the growing global integration of digital assets into financial markets. However, this embrace will be accompanied by rigorous regulatory frameworks designed to mitigate associated risks.

The Bank of Russia, through its First Deputy Chairman Vladimir Chistyukhin, announced that while banks will be allowed to participate in crypto-related operations, these activities will be subject to strict capital limits and reserve requirements. Chistyukhin articulated the central bank’s conservative nature, questioning whether holding crypto on balance sheets constitutes a core banking function. Nevertheless, following extensive discussions with the banking sector, a consensus emerged that completely isolating Russian banks from this evolving market would be imprudent.

Imposing Strict Controls on Crypto Exposure

To prevent cryptocurrency operations from becoming a dominant or uncontrolled aspect of banking, the Bank of Russia intends to implement “fairly strict requirements.” This cautious approach is particularly noteworthy given the central bank’s historical reluctance to fully legalize the free circulation of cryptocurrencies within the Russian economy. The move towards allowing some level of engagement with digital assets is partly attributed to the evolving geopolitical landscape and the impact of Western sanctions, which have spurred the establishment of an “experimental legal regime” for crypto transactions.

This experimental regime permits Russian companies to utilize cryptocurrencies for international settlements and grants access to digital assets for a select group of highly qualified investors. Previously, financial firms were authorized to offer crypto derivatives to similar corporate entities and sophisticated individual investors who meet stringent financial criteria, such as substantial bank deposits and high annual incomes. These thresholds are still being refined in conjunction with the Ministry of Finance. Complementing these measures, the Bank of Russia has also proposed draft standards that would limit a bank’s crypto exposure to a mere 1% of its capital.

Anticipating Comprehensive Crypto Legislation

Looking ahead, the Bank of Russia anticipates the passage of comprehensive legislation governing crypto investments by the upcoming year. Vladimir Chistyukhin expressed a strong desire for a law that addresses all facets of cryptocurrency investment to be adopted in 2026. This legislative framework is expected to enable the implementation of a licensing mechanism, potentially allowing the first licensed service providers to enter the market by the end of that year.

Clarifying the status of entities already engaged in cryptocurrency transactions is acknowledged as a process that will require time, particularly in order to amend related laws, including those concerning law enforcement, with an expected effective date of 2027. The central bank believes this measured approach will enable Russia to foster innovation within the crypto space while simultaneously integrating mainstream digital instruments. Governor Elvira Nabiullina has echoed this sentiment, stating that the Bank of Russia expects the cryptocurrency bill to be submitted to the State Duma shortly, underscoring the growing momentum towards formalizing the country’s stance on digital assets.