The recent actions of Russian President Vladimir Putin, who has reportedly signed legislation to formally regulate digital currencies and digital rights within the nation, indicate a significant step in the governance of cryptocurrency. However, the law maintains a ban on the use of Bitcoin for purchasing goods at this time.

According to reports from news agency Tass, the new legislation restricts operations to registered entities acting as exchanges and imposes limits on cryptocurrency investments by retail investors.

Currently, retail investors are permitted to trade a select group of highly liquid cryptocurrencies, with annual trading limited to 300,000 rubles (approximately $3,700). Qualified investors, on the other hand, are not subject to such restrictions.

Despite these regulatory advancements, the law continues to prohibit the use of digital currencies and digital rights as a legitimate means of payment or legal tender within Russia. Since 2022, the use of cryptocurrency for payments has been illegal.

The report further suggests that Russian citizens may utilize digital currencies for settlements involving foreign trade contracts with non-residents or in connection with cryptocurrency mining activities.

In recent years, Russian regulators, lawmakers, and the central bank have been making efforts to establish comprehensive guidelines for digital assets.

Contradictions in Putin’s Stance on Bitcoin

The prohibition on utilizing digital currencies as a payment method may surprise observers who have heard President Putin’s earlier remarks regarding Bitcoin.

In 2024, the Russian leader expressed a favorable view of Bitcoin, suggesting that emerging technologies could facilitate monetary transactions. He stated, “For example, Bitcoin, who can ban it? Nobody.”

Additionally, the president has indicated that Russia possesses “competitive advantages” in the realm of Bitcoin mining due to its ample supply of affordable energy.

Nonetheless, Russian lawmakers remain intent on maintaining stringent control over the financial activities of their citizens. The usage of digital currencies has been allowed for international transactions, likely as a means of circumventing Western sanctions.

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