Russia’s central bank ready to ease crypto regulations

The Bank of Russia now deems it “possible” to relax regulations currently limiting cryptocurrency transactions in the sanctioned nation.

Moscow’s monetary authority is engaged in talks with the finance ministry, which first unveiled that Russian regulators are leaning towards leaner rules.

Russia prepares to abandon restrictive crypto regulations

Easing Russia’s cryptocurrency regulations is becoming a likely scenario, with another key regulatory body indicating a desire to expand Russians’ access to digital assets.

The Ministry of Finance (Minfin) broke the news earlier in November, and it has just been confirmed by a high-ranking representative of the Central Bank of Russia (CBR).

Last week, Deputy Finance Minister Ivan Chebeskov told local media that financial authorities are ready to ditch an exclusive regulatory definition, as reported by Cryptopolitan.

The latter allows only a small group of “highly qualified” investors to touch decentralized digital currencies like Bitcoin and their derivatives.

“Indeed, our colleagues from the finance ministry correctly stated that we are discussing the feasibility of using [the term] ‘highly qualified’ in the new crypto regulation,” Bank of Russia’s First Deputy Chairman Vladimir Chistyukhin confirmed.

Speaking to reporters on Monday, he made it clear the CBR now thinks it’s “quite possible” to relax regulations, adding:

“Rules for crypto asset circulation should be eased beyond this extremely narrow category of investors, especially given the restrictions currently in place for Russian legal entities and individuals using normal currencies to make payments abroad.”

Sanctions make Russia change its attitude toward cryptocurrencies

The Central Bank of the Russian Federation may relieve crypto regulations due to sanctions, the business daily Kommersant wrote in an article devoted to the development.

Waves of penalties imposed by Western allies on Moscow over its invasion of neighboring Ukraine have severely limited Russian access to traditional financial channels over the past few years.

Despite previously maintaining a strong opposition to permitting their free circulation in the nation’s economy, in March of this year, the CBR proposed implementing an “experimental legal regime” (ELR) for operations with cryptocurrencies.

Under the ELR, Russian companies are able to use digital coins in cross-border settlements, while the so-called “superquals” are free to purchase and trade crypto assets.

In May, the Bank of Russia authorized the offering of derivative instruments based on them on the domestic market by issuing a special circular for financial institutions.

These are still available only to investors who have been recognized as highly qualified. Besides professional firms, private individuals can also obtain the status, provided they meet certain requirements regarding their income and other investments.

The thresholds are quite high – they should have at least 100 million rubles in bank deposits and securities and an annual income from the past year of more than 50 million rubles (around $1.2 million and $600,000).

This puts crypto out of reach for most ordinary Russians. The CBR recently admitted household investments in Russian crypto derivatives remain relatively low, at a little over $47 million, noting they pose no risk for the country’s financial system.

The bank now seems inclined to support the expansion of this market. In October, the regulator decided to allow commercial banks to operate with digital assets.

It also urged lawmakers to adopt comprehensive legislation regulating crypto investments outside the framework of the experimental regime.

Then, in November, the CBR announced it intends to allow mutual funds to put money in crypto derivatives and recently proposed the necessary draft amendments.

Crypto may become ‘normal,’ CBR official says

Vladimir Chistyukhin now emphasized that crypto assets may become a “normal instrument,” noting they are already being employed as such.

“Where we’ll settle on this depends on future discussions with the Ministry of Finance. As I said, we are in close dialogue,” the deputy governor remarked.

“It seems to me we’ll be able to advance and publicly express our position by the end of the year,” Chistyukhin elaborated in conclusion.

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