Russia tightens crypto controls with experimental regime

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Elvira Nabiullina, the chair of the Central Bank of the Russian Federation, signaled after the regulatory board’s meeting that the bank advocates curbing cryptocurrency activity outside its experimental regime. The intended approach emphasizes bringing digital assets into a controlled environment where oversight is clear and risk is managed. The move reflects the central bank’s cautious stance toward crypto markets amid concerns over volatility, illicit use, and the need to test monetary innovations before broader adoption. While the regulator is considering strict limits on non-experimental operations, the door remains open to future pilots that help shape policy in Russia’s evolving financial landscape.

The bank official noted that cryptocurrency tools are highly volatile and frequently used to conduct opaque activities. Because prices can swing dramatically in short periods, and transaction traces can be unclear, there is a heightened risk of hiding illicit activity, evasion of sanctions, or other opaque practices. The central bank urges caution and aims to preserve financial stability by restricting non-regulated uses. The bank’s analysis emphasizes the need to ensure that any crypto-related activity within Russia is anchored in robust rules, clear reporting, and strong consumer protections.

Nevertheless, Nabiullina stressed that the bank would allow a limited group of qualified investors to participate in crypto trading within the Russian market under the experimental regime. This targeted access would enable experienced investors to gain exposure while the regulator collects data, monitors behavior, and evaluates the impact on the wider financial system. The proposal distinguishes between investment in digital assets under tight supervision and their use as everyday payment methods, which would require a separate and more conservative framework. By introducing controlled participation, the bank seeks to balance innovation with prudence.

Regarding the use of crypto as a payment instrument, the central bank indicated that such use is being considered within a narrow scope. The regulator stressed that non-experimental crypto settlements would continue to be prohibited for now, allowing only transactions within the experimental regime and subject to strict guidelines. This distinction helps reduce risks while giving the market an opportunity to test infrastructure, custody, settlement, and risk controls in a supervised setting. The emphasis remains on building resilience and preventing leakage into informal markets.

In a recent move, the bank floated a plan to permit Russian investors to receive and sell cryptocurrencies as part of the experimental regime for a restricted circle of participants. The proposal envisions a phased approach with clear eligibility criteria, enhanced due diligence, and reporting requirements designed to capture data on trading volumes, liquidity, and price discovery. Regulators would require compliant exchanges, traceable wallets, and transparent settlement mechanisms to minimize the potential for fraud and to strengthen consumer protection. The aim is to observe how regulated activity interacts with traditional markets, identify potential systemic risk, and inform future policy steps.

Observers note that the evolving regulatory stance comes amid ongoing debates about fraud risk, market manipulation, and the use of crypto assets in unofficial economies. The central bank has signaled that supervision will intensify as activity grows, with possible measures including stricter licensing for crypto platforms, stricter KYC and AML controls, and clearer rules for custody and disclosure. While the bank seeks to empower legitimate investment and technology development, it also underscores the need to shield households and the financial system from volatility and misuse.

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