Russia Passes Law to Regulate Crypto Exchanges, Keeps Payment Ban in Place

President Vladimir Putin signed a law establishing exchange licensing requirements for digital currencies while preserving a prohibition on using cryptocurrency as payment or legal tender within Russia, according to Bitcoin Magazine's reporting.

The legislation creates a two-tier system for retail and qualified investors. Retail participants are limited to trading the most liquid cryptocurrencies, capped at 300,000 rubles ($3,700) annually. Qualified investors face no restrictions on trading amounts. Only registered entities may operate as exchanges under the new framework.

The payment ban, in effect since 2022, remains intact despite Putin's 2024 statements that Bitcoin cannot be banned. Russians are prohibited from using digital currencies and digital rights as a means of payment or legal tender domestically. However, two carve-outs allow crypto use for international settlements: Russians engaged in foreign trade with non-residents may use crypto for contract settlements, and those involved in cryptocurrency mining may also use digital currencies for payments.

The law's definition of 'most liquid cryptocurrencies', the assets available to retail traders, remains unspecified in available reporting, creating ambiguity about which assets will be accessible to smaller investors and how that list may shift during implementation.

The bear case hinges on several constraints. The retail cap severely limits market participation for non-qualified investors, potentially reducing exchange liquidity. The foreign-trade and mining carve-outs, though narrow in scope, create potential channels for circumventing the payment ban, a detail that may draw scrutiny from international regulators. The payment ban itself stands in tension with Putin's public optimism about Bitcoin's uncensorability, revealing a gap between rhetoric and regulatory action.

Implementation details remain open: the timeline for exchange licensing, enforcement mechanisms for violations, how qualified investor status will be verified, and whether the law applies to decentralized exchanges or only registered centralized venues are all unconfirmed in the source material.