The Russian government has formally approved a significant package of draft bills designed to overhaul the regulation of digital currencies and digital rights within the country. This move aims to channel all domestic cryptocurrency trading exclusively through licensed intermediaries, tightening state oversight significantly.

New Regulatory Framework: Licensed Intermediaries Mandated

Under the newly approved regulatory structure, any transaction involving digital currency that bypasses regulated intermediaries will be strictly prohibited. The Ministry stated that this framework establishes a comprehensive licensing regime for all entities engaging in crypto operations.

Scope of Licensed Entities

This licensing requirement applies to digital exchanges and custodial services. Furthermore, banks and brokers will be permitted to engage in these activities, contingent upon their adherence to specific prudential requirements set by regulators.

Restrictions for Retail Investors

The legislation introduces notable limitations for non-qualified, or retail, investors. These investors will face an annual cap on purchasing the “most liquid digital currencies,” which will be defined by the Bank of Russia, limited to approximately $3,700.

Retail investors seeking broader access will be required to pass a specific test to qualify for higher levels of participation. Qualified investors, however, will retain broader access to the market.

Implications for Domestic and Global Crypto Activity

The package includes amendments to various Russian legislative acts and changes to the administrative offenses code, including provisions for administrative liability for unlicensed exchange activities. This signals a strong intent to police the sector.

However, the proposal does not constitute an outright ban on crypto ownership. Residents will still be permitted to acquire cryptocurrency abroad using foreign accounts, provided these transactions are subsequently reported to Russian tax authorities.

Industry Concerns Over Market Shift

Critics argue that these stringent rules might inadvertently push activity into unregulated, underground channels rather than formalizing the sector. Sergey Mendeleev, founder of Exved, compared the situation to casino regulation, suggesting activity will move outside state control.

Nikita Zuborev, chief analyst at BestChange, noted that the legislation targets the “accessible, transparent infrastructure for converting crypto to fiat,” effectively isolating the domestic financial system. He emphasized that issuing crypto loans without a licensed intermediary will also be banned.

Zuborev added that interacting with decentralized exchanges will carry substantial legal and operational risks due to the lack of a centralized entity. This effectively places active traders in a legal “grey zone” or forces them to operate under foreign jurisdictions, complicating legal income declaration.