Russia Confirms Crypto Is Not Legal Tender

In recent statements, Russian news agencies reported that Anatoly Aksakov, the Chairman of the State Duma Committee on Financial Markets, has affirmed that cryptocurrencies “will never become money” within Russia. He emphasized that they should only be viewed as investment instruments, reinforcing that payments must strictly be made in Russian rubles.

Key Takeaways

Russia has declared cryptocurrencies will not be recognized as legal tender.
Payments must be made in Russian rubles according to existing laws.
Cryptocurrencies are treated as investment instruments, not currency.
Central bank concerns about financial stability play a key role in this stance.
Public officials must declare their cryptocurrency holdings to promote transparency.

Russia

Ruble Remains the Only Legal Currency

This viewpoint aligns with the current legal framework in Russia. A federal law established in 2020 concerning digital financial assets distinguishes digital currency from the country’s monetary unit and prohibits its use as a payment method domestically. Under this law, cryptocurrencies and tokens are classified as property or investment items rather than forms of legal tender.

Concerns from the Central Bank

Authorities in Moscow have echoed the central bank’s concerns, expressing that permitting cryptocurrencies for everyday transactions could undermine monetary control and financial stability. Regulators maintain that the role of the ruble must be preserved, citing that the volatility of assets like Bitcoin and Ethereum makes them impractical for routine transactions.

Total crypto market cap currently at $2.96 trillion. Chart: TradingView

Although cryptocurrencies cannot be used for purchasing goods and services domestically, it has been reported that they can still exist within regulated frameworks. Lawmakers are viewing cryptocurrencies as investment assets rather than currency.

There are discussions around specific exceptions for corporate or cross-border transactions under regulated conditions, but these do not alter the fundamental prohibition against domestic payments.

Practical Implications of the Stance

The consequences of this regulatory stance are evident. Russian residents and businesses are prohibited from accepting digital currencies in lieu of rubles for transactional purposes. However, individuals are still permitted to hold, trade, or invest in cryptocurrencies within a legal framework that distinguishes ownership from the right to make payments. Furthermore, public officials are required to declare their digital asset holdings, linking transparency requirements to the new regulatory landscape.

Reports from multiple sources indicate a clear political message: payments must remain in rubles. While lawmakers are considering improvements in trading regulations, custody, and reporting obligations, there is no indication of a shift towards allowing cryptocurrencies to replace the ruble in everyday transactions. This position sets Russia apart from some nations that permit cryptocurrency payments or grant them legal tender status.