In order for virtual currency exchanges to operate in Russia, they must establish a subsidiary there and comply with laws, the country’s financial authorities have revealed.
The statement came amid concerns that Russian authorities plan to cut off access to global trading platforms for digital assets once they regulate the domestic market this year.
Russia to approve virtual currency exchanges if they establish a base in Russia
The Central Bank of Russia (CBR) has indicated that foreign-based providers of crypto-related services will be allowed to operate in the Russian economy through locally registered subsidiaries.
Interfax reported on Friday that the regulator’s stance, announced by Ekaterina Rozgacheva, head of the Financial Markets Strategy and Development Department, also applies to crypto exchanges and similar platforms.
Late last year, in a turning point for Russia’s attitude towards decentralized digital currencies like Bitcoin, monetary authorities approved a new concept that forms the basis for comprehensive regulation of the field.
The policy document, excerpts of which were published in late December, envisages the recognition of virtual currencies and stablecoins as “monetary assets” and the introduction of rules governing activities such as investment and trading.
Under the upcoming legal framework, which must be adopted by July 1 to make the initiative a reality, “citizens will be required to conduct transactions within Russia through regulated intermediaries,” Rozgacheva told the Financial Cybersecurity Forum.
Those who have already acquired cryptocurrencies will be able to transfer them to the accounts of such organizations during the transition period, she told reporters on the sidelines of the event.
“If a foreign intermediary is interested in operating on the Russian market, it can open its own organization and provide its services within the framework of Russian law.”
The central bank official stressed that regulators are taking the same approach as traditional financial market intermediaries.
Similarly, penalties for violating the new virtual currency law will mirror those currently imposed for illegal banking activities. Additionally, those who use the services of unregulated intermediaries may be subject to administrative liability. The latter is expected to be introduced by July 1, 2027.
Under Russian criminal law, serious banking violations can result in fines of up to 300,000 rubles (about $4,000) or up to four years in prison for individuals. Punishments for people acting as organized groups are even harsher, with fines of up to 1 million rubles and seven years in prison.
Russia’s first legal cryptocurrency transaction expected by end of 2026
At the “Cybersecurity in Finance” conference held by CBR in Yekaterinburg, Rozgacheva also said that the first crypto transactions outside the gray zone could take place in Russia by the end of the year after the respective laws are passed.
Elaborating on this issue in the session “Cryptocurrency: Challenges and Opportunities”, she said, as quoted by Prime News Agency:
“We hope that this bill will be submitted to the State Duma soon and we will have the opportunity to discuss many details. And if the bill is adopted, we believe that the first (cryptocurrency) transactions could begin before the end of the year.”
Last spring, the Bank of Russia introduced an “experimental legal regime” for cryptocurrency trading, giving financial companies the power to offer derivatives on the domestic market amid a growing cryptocurrency trading volume that has already reached 50 billion rubles per day.
This has given Russian companies the opportunity to use Bitcoin and other currencies for cross-border payments to circumvent sanctions, and given a small number of “highly qualified” investors the opportunity to add digital assets to their portfolios.
This temporary arrangement should be replaced by permanent regulations, one of the pillars of which should be expanded access for investors, including ordinary Russians, albeit under severe restrictions.
Meanwhile, analysts earlier this week expressed concerns that Moscow could block traffic to popular crypto trading platforms if it starts issuing licenses to domestic exchanges.
World-renowned providers of such services are still widely used by Russians, despite restrictions imposed in response to Russia’s invasion of Ukraine and the withdrawal of major companies like Binance.
