Russia’s Stance on Cryptocurrencies: Ban, Exceptions, and Regulations

While Russia continues to enforce a ban on cryptocurrencies  payments under a law that went into effect in January, the country currently has no plans to completely ban transactions by citizens.

In a report by local Interfax news agency, Alexey Moiseev, Deputy Minister of Finance of the Russian Federation, said he believes Russian citizens can continue to buy and use cryptocurrencies abroad without the threat of lawsuits domestically. Cryptocurrency payments in the country are currently banned.

But Russians were allowed to buy and trade cryptocurrencies like Bitcoin (BTC).

“Russian citizens can open wallets outside of the Russian Federation, but if they operate inside the Russian Federation, they will be banned in the near future due to our financial sovereignty,” said Moiseev.

The Deputy Finance Minister added that lawmakers have yet to properly define digital currencies and blockchain technology in the Russian Civil Code. The Russian government has stated that the acceptance of Bitcoin as the official currency could have a negative impact on the country’s economic and financial system.

Russia’s position is in contrast to China, where financial institutions and regulators have repeatedly issued anti-crypto guidelines and statements. Most recently, the People’s Bank of China stated that all cryptocurrency transactions in the country were illegal, and previously miners in several provinces fled their activities amid crackdown on cryptocurrency exchanges.

Related: Survey shows that 77% of Russian investors prefer Bitcoin to gold and foreign exchange

However, some Russian officials have stated that using a digital ruble issued by the country’s central bank does not involve the same financial risks as BTC and other cryptocurrencies. Anatoly Aksakov, chairman of the Russian State Duma committee on financial markets, said last year that a digital currency from the Russian central bank could become an integral part of national payments by 2024.