Russia prepares for total crypto ban as geopolitical tensions rise

Russia
will
enforce
a
strict
ban
on
the
general
circulation
of
crypto
assets
such
as
Bitcoin,
allowing
only
digital
financial
assets
issued
within
its
jurisdiction.
This
initiative,
led
by
Anatoly
Aksakov,
Chairman
of
the
State
Duma
Committee
on
the
Financial
Market,
is
part
of
a
broader
governmental
effort
to
control
the
crypto
ecosystem
amid
rising
geopolitical
tensions.

Aksakov

stated
that
the
forthcoming
legislation
aims
to
restrict
non-Russian
crypto
operations
to
reinforce
the
ruble’s
dominance,
explaining:

“Digital
financial
assets
issued
in
Russian
jurisdiction,
and
digital
rubles
will
be
allowed.
The
need
for
a
ban
is
due
to
the
fact
that
today
cryptocurrency
–
is
a
quasi-currency
that
replaces
the
ruble
in
the
country.
But
only
the
Russian
ruble
fulfills
the
mission
of
the
monetary
unit,
so
this
decision
has
been
made.”

The
bill
will
carve
out
exceptions
for
crypto
miners
and
Central
Bank-sponsored
test
projects
within
an
experimental
legal
framework,
as
crypto
mining
significantly
boosts
Russia’s
tax
revenues.
According
to
data
from
Statista,
crypto
miners

produce
over
$2.59
billion
in
liquidity
for

foreign
trade
settlements
in
Russia.

However,
there
is
an
intense
internal
debate
among
Russian
policymakers
regarding
this
approach.
Artem
Kiryanov,
Deputy
Chairman
of
the
State
Duma
Committee
on
Economic
Policy,
stressed
the
importance
of
precise
regulations.

“The
regulation
of
cryptocurrency
should
be
prescribed
in
the
digital
code,
which
would
clearly
spell
out
the
conceptual
apparatus
and
common
judicial
law
enforcement
practice,”
Kiryanov
said.

In
contrast,
Russia’s
Finance
Minister,
Anton
Siluanov,
has
pushed
for
a
more
moderated
stance,
advocating
for
regulation
to
enable
the
use
of
cryptocurrencies
in
both
domestic
and
international
transactions.
Elvira
Nabiullina,
Head
of
the
Bank
of
Russia,
also
supports
the
experimental
use
of
cryptocurrencies
in
international
settlements.

Recent
reports
indicate
that

Russian
entities
have
used
cryptocurrencies,
particularly
Tether’s
USDT,
to
procure
critical
components
for
military
technology.
In
one
notable
case,
Andrey
Zverev,
a
Russian
operative
based
in
China,
used
USDT
in
2022
to
bypass
traditional
banking
channels
and
purchase
drone
components
essential
for
military
operations
in

Ukraine,
avoiding
the
scrutiny
typically
associated
with
sanctions-wary
financial
institutions.