Putin signs Russia's first comprehensive law regulating cryptocurrencies

Vladimir Putin, the President of Russia, has signed a bill establishing the country's first comprehensive regulatory framework for cryptocurrencies. This law formally defines legal standards for cryptocurrency exchanges, digital asset custodians, mining operators, brokers, and providers of financial market infrastructure, and also establishes a regulatory system for the issuance and distribution of digital financial assets (DFAs). Most of the key provisions will take effect on September 1, 2026. In terms of investor protection, a limit has been set for non-qualified investors, allowing them to purchase only up to 300,000 rubles worth of approved cryptocurrencies annually through each brokerage. Qualified investors can trade without this limit if they pass a separate qualification test. Companies wishing to engage in cryptocurrency trading activities must register with the government and maintain a minimum capital of 15 million rubles, with a grace period until July 1, 2027. Existing digital asset exchange operators must complete the transition to the new regulatory framework by March 1, 2027. While this law continues to prohibit the use of cryptocurrencies as a means of payment for goods and services and related advertising, exceptions are made for cross-border transactions, transactions related to mining, certain system fees, and payments related to securities and digital assets. Banks are obligated to refuse transfers that are suspected of being linked to unregistered cryptocurrency exchange operators. This measure aims to cut off the flow of funds through unlicensed exchanges, signifying a more active role for the Russian financial system in monitoring digital assets. This bill is significant because it provides Russia with a clear legal framework for the cryptocurrency market for the first time. Domestic exchanges and mining companies, which previously operated in a state of legal ambiguity, can now conduct their business under clear standards, and the potential for institutional investors to enter the market has increased. However, the ban on using cryptocurrencies as a means of payment within the domestic market remains in place, which means that the scope of cryptocurrency usage in Russia is still limited.