Russia is advancing its efforts to regulate the cryptocurrency market, with the State Duma currently reviewing a proposed bill aimed at mitigating fraud within the industry, according to recent reports.

The legislation seeks to address “the illegal use of cryptocurrencies within our country,” as stated by Anatoly Aksakov, chairman of the State Duma Committee on Financial Markets.

According to the Russian news agency Tass, lawmakers are scheduled to vote on the bill in its second and third readings this week and are also working to create a legal framework that permits individuals to utilize cryptocurrencies for international transactions.

Despite the fact that the use of cryptocurrencies as a payment method has been prohibited in Russia since 2022, lawmakers have shown a willingness to explore their potential for facilitating international settlements.

Moreover, President Vladimir Putin has previously acknowledged the potential of digital asset mining, recognizing the country’s “certain competitive advantages” in this field, particularly due to its energy surplus and cold climate.

In the previous year, the president enacted legislation that permits cryptocurrency mining within the country, contingent upon approval from the digital ministry, while foreign operations remain restricted from conducting business in Russia.

In 2023, the Russian legislature passed a bill that legalized the use of digital currency for international payments. This legislation has likely assisted the country in navigating international sanctions previously imposed by the United States and European nations following the annexation of Crimea in 2014, with additional penalties introduced in response to the 2022 invasion of Ukraine.

Leading Russian banks are preparing to implement cryptocurrency trading services in anticipation of the new regulatory framework. Lawmakers have indicated that investors will be required to pass an assessment before engaging in crypto investments and will face limits on their purchasing capabilities.

Pro-Bitcoin Putin?

Russia’s regulatory approach to cryptocurrencies has historically been intricate; however, Putin has previously expressed a favorable view of Bitcoin.

During a forum in Moscow in December 2024, the Russian leader discussed the prevailing dominance of the dollar and other payment mechanisms, emphasizing the emergence of new technologies capable of facilitating financial transactions.

“For example, Bitcoin, who can ban it? Nobody,” he remarked at that time. “And who can prohibit the use of other electronic payment instruments? Nobody, because these are new technologies.”

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