Russia’s regulations on Cryptocurrency 

Russia finalising a bill to legalise crypto as a form of payment

Due to the ongoing geopolitical conflict between Russia and Ukraine which started on the 24^th of February 2022, we have seen an unprecedented increase in regulations, as countries around the world have condemned Russia’s actions and applied sanctions through the traditional financial system, designed to damage Russia’s economy.

‘’Russia proposes ban on use and mining of cryptocurrencies’’, the headline announcement from January 2022 where Russia's central bank proposed banning the use and mining of cryptocurrencies on Russian territory due to fears of causing financial instability due to its volatility has taken a 360 degrees turn.

In an attempt to Sanction proof Russia, The Russian Government announced in February 2022 that they were working on the ‘’digital ruble’’, a program where transactions would be carried out on a Russian-operated blockchain system. This version of a Central Bank Digital Currency has been previously adopted by many countries like Brazil, looking to escape dependency on the US Dollar.

Economic sanctions against Russia have attempted to starve the Kremlin of its ability to wage and finance its war against Kyiv's government, however, diversifying into Bitcoin and other currencies could help Russia lessen its dependence on dollars and euros issued by states like the U.S. and the EU and escape the sanctions imposed by them.

‘’In March, Sberbank, Russia’s top lender, was granted a license by the country’s central bank to begin issuing digital assets in response to US economic sanctions. Assets issued on the bank’s digital platform will be recorded and circulated via a distributed ledger technology system, ensuring “data security” and data immutability, Sberbank said.

The license will allow companies in Russia to issue their own digital assets, providing they prove they have the cash requirements, and use digital assets issued through the bank’s information system. The news came as concern over how Russian entities may be using cryptocurrencies to evade sanctions heightened.’’

The EU Commission has advised

If and when large amounts of crypto assets are converted to fiat currencies, and vice-versa, these transactions will fall under the usual anti-money laundering rules

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