Russia Proposes Banks, Brokers Can Run Crypto Services

• Russian central bank proposes a framework for banks to offer crypto services.
• The proposal classifies cryptocurrency and stablecoins as “currency valuables.”
• Crypto stakeholders say the plan will hurt existing crypto service providers in Russia.

The Russian Central Bank plans to allow banks and brokerage firms to run crypto exchanges under a simplified licensing procedure, placing traditional financial institutions at the center of the country’s regulated digital asset market. 

According to Central Bank Governor Elvira Nabiullina, existing financial institutions already have compliance infrastructure that could be used to supervise crypto transactions.

Nabiullina acknowledged the extensive experience of traditional banks in AML/CFT and fraud prevention, noting that this experience will help protect clients in the crypto market. The proposed framework is designed to allow banks and brokers to obtain crypto exchange licenses through a notification-based procedure rather than a separate licensing process. This implies that the institutions will be allowed to offer cryptocurrency exchange services using their existing licenses.

Part of a Broader Program

It is worth noting that the proposal is part of a broader regulatory framework being developed for digital assets in Russia. The emerging plan classifies cryptocurrency and stablecoins as “currency valuables.” Hence, users can own and trade them, while their use as payment tools will be restricted to domestic regions, with limited exceptions for international trade.

Under the proposed regulation, Russian residents will only be allowed to conduct crypto transactions through licensed intermediaries, such as banks and brokers. Other protocols in the framework will address investor protection, such as subjecting unqualified investors to a knowledge test and an annual 300,000 rubles purchase limit for liquid crypto through a single intermediary.

Stakeholders Criticize Bank of Russia’s Crypto Proposal

In the meantime, some Russian crypto community stakeholders have criticized the proposal, including crypto entrepreneur Sergey Mendeleev, who said the plan aims to transfer crypto exchange activity from existing market operators to major banks. Mendeleev stated that the cryptocurrency market does not work that way.

Crypto compliance provider BitOK founder, Dmitriy Machikhin, also criticized the model, noting that crypto users in Russia would likely choose foreign platforms over domestic intermediaries.

Related: Russia Flags Crypto as Key Tool in Illegal Financial Schemes