Russia has banned direct peer-to-peer (P2P) cryptocurrency trading, as well as retail transfers to self-custody wallets. Bank of Russia announced the update to the comprehensive crypto regulations signed into law by President Vladimir Putin in August.
Following the bans, crypto traders now have a grace period until July 1, 2027. Thereafter, the central bank will prohibit P2P trading in its entirety, replacing it with trading through state-licensed intermediaries.
The second part of the guidelines prohibits individuals from moving their cryptocurrencies out of regulated wallets and into non-custodial or self-custodial wallets. These include hardware wallets such as Ledger and Trezor, and software wallets such as Trust Wallet and MetaMask.
The state-licensed intermediaries or regulated custodians in this context include Russia’s largest state-owned commercial bank, Sberbank, and VTB. The nation’s central bank and primary crypto regulator recently authorized both entities to offer crypto custodial and exchange services.
Notably, the crypto regulations that went live on September 1 mandated a mandatory crypto risk knowledge test before trading legally.
Under that law, investors are split into two:
Additionally, using cryptocurrencies as a form of legal tender is illegal. Mined cryptocurrencies can be circulated as long as they originate from licensed domestic miners.
On a foreign scale, Russians can trade and hold cryptocurrencies abroad if they use foreign bank accounts and make the necessary tax reports.
And while crypto use remains highly controlled locally, Russia has freed up the use of cryptocurrencies for cross-border import-export transactions to bypass international sanctions.
Most social media comments criticized the stringent and tight regulations, saying they go against the basic decentralization and permissionless ethos of blockchain and cryptocurrencies.
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