Bill Overview
Russia's lower house of parliament, the State Duma, has advanced a sweeping bill to regulate digital currencies, marking a major step toward formal oversight of the country's crypto market. Lawmakers approved the draft legislation in its first reading with 327 of 340 deputies voting in favor. The bill, titled 'On Digital Currency and Digital Rights,' was introduced by the Russian government and sets out a comprehensive framework governing how cryptocurrencies can be issued, traded, and stored. If adopted, the law will take effect on July 1, 2026, though some provisions carry later implementation dates.
Legal Status and Usage Restrictions
A central feature of the bill is the classification of digital currency as property. This change allows crypto holdings to be recognized in legal disputes, including bankruptcy proceedings and divorce settlements. At the same time, the legislation maintains a strict ban on using cryptocurrency for domestic payments. The Russian ruble remains the sole legal means of payment within the country. However, the bill allows digital currencies to be used in foreign trade, offering companies a potential tool for cross-border settlements. Supporters argue this provision could help Russian firms navigate sanctions by enabling transactions with overseas partners outside traditional financial systems.
Market Participants and Investor Tiering
The proposal defines key legal concepts, including the 'circulation of digital currency' and the 'organization of digital rights circulation,' while establishing which entities can operate in the market. It introduces five categories of regulated participants: exchanges, brokers, management companies, depositories, and exchangers. All must obtain licenses and operate under supervision from the Bank of Russia. The central bank would gain authority to authorize, regulate, and oversee these entities, including the power to impose transaction limits and compliance requirements. The bill introduces a tiered system for investors. Qualified investors will face fewer restrictions, while non-qualified participants must pass testing and may encounter annual limits on crypto purchases. Lawmakers say this structure aims to reduce risk exposure for retail investors.
Digital Asset Custody and Mining
The legislation outlines rules for digital asset custody. A new digital depository system would manage crypto holdings, with restrictions on transfers to personal wallets and limitations on withdrawals to approved foreign institutions. Direct peer-to-peer transactions are set to face tighter controls, with a broader ban scheduled to take effect in 2027. Until then, peer-to-peer transactions remain legal, though enforcement measures such as payment blocking and blacklisting mechanisms are expected to begin earlier. Mining activity is addressed within the framework, with rules requiring the use of Russian infrastructure and formal accounting of mined assets.
Amendments and Legislative Process
Despite strong support in the first reading, some lawmakers and committees have called for revisions. The State Duma Committee on Competition Protection warned that excessive regulation could hinder market development, while the Committee on Financial Markets urged greater clarity around non-custodial wallets and stronger legal safeguards for privately held assets. The bill must pass two more readings in the State Duma before moving to the Federation Council and then to the president for signature. Amendments for the second reading are due within two weeks.