Key Takeaways
- Russia mandated crypto transfers via 13 licensed exchanges while banning direct resident P2P trading by 2027.
- Central bank rules restrict transfers to self-custody wallets and between individual licensed accounts.
- Regulations aim to curb tax evasion and enforce oversight, though only 20% of trading volume is expected to shift.
Bank of Russia Bans Transactions Going to Self-Custody Wallets
The Russian government is once again tightening control over the cryptocurrency industry and crypto holders exercising self-custody of their assets.
In a series of explanations on the current state of affairs regarding cryptocurrency regulation, the Bank of Russia stressed that, per Part 1 of Article 30 of the Federal Law № 282-FZ, Russian residents can transfer crypto assets using brokers or exchanges licensed by the bank.
According to central bank data, 13 organizations are currently licensed as digital currency exchanges, including large institutions like VTB Bank, Sberbank, and smaller organizations.
The bank also referred to the legality of peer-to-peer (P2P) crypto transactions between Russian residents, highlighting that these are allowed until July 1, 2027, as the list of approved transactions in Part 1 of Article 30 of Federal Law № 282-FZ does not contemplate direct transactions between individuals.
In the same way, withdrawals from digital currency accounts hosted by licensed exchanges to self-custody wallets are not permitted, even when these two are managed by the same individual. Transactions between two digital accounts hosted by licensed exchanges but owned by different individuals are also prohibited, in accordance with Part 5 of Article 31 of Federal Law № 282-FZ.
According to analysts, the goal is to have full visibility of the cryptocurrency market once Russians transfer funds to local exchanges, enabling tighter vigilance over fund movements and tax evasion, as digital assets are often used to make payments and hide money flows from national authorities’ oversight.
Nonetheless, the approved regulatory framework allows importers and exporters to settle transactions with approved digital assets to bypass international sanctions. Conversely, the bank has banned crypto for internal payments. Instead, the bank supports its central bank digital currency (CBDC), the digital ruble, which abandoned pilot mode and was launched nationwide in September.
Deputy Finance Minister Ivan Chebeskov estimated that Russians own at least nearly $44 trillion in crypto assets, Nonetheelss the migration to internal accounts is expected to progress slowly, with Sberbank Deputy Chairman of the Executive Board Anatoly Popov estimating that only 20% of the Russian volumes traded will move to licensed exchanges, with further progress being attained in subsequent years.
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