Russia’s lower house has taken a major step by first reading a crypto bill that creates a centralized regulatory framework with the Bank of Russia licensing and supervising all crypto market participants.

Titled On Digital Currency and Digital Rights, the measure would allow purchases through approved intermediaries as soon as mid-year, while unlicensed platforms would be banned starting in 2027 if enacted.

The bill envisions sweeping changes to Russia’s criminal code to address unlicensed crypto services, with penalties and enhanced enforcement provisions set to evolve as the regulatory package develops.

A court briefing cautioned that penalties hinge on the full set of regulatory acts to be adopted, noting the current draft isn’t yet enough to establish criminal liability.

Mining operations face targeted regulation, including energy-use standards, a formal mining registry, and region-based incentives like preferential electricity rates to formalize the sector and address grid concerns.

Several committees warned the package could over-regulate and hinder market development, urging clearer non-custodial wallet rules and stronger safeguards for privately held assets.

The act imposes KYC, seven-year transaction records, and suspicious-activity reporting for exchanges, with penalties ranging from license revocation to possible criminal prosecutions for non-compliance.

Industry voices warn the laws could push crypto activity underground or complicate compliance, rather than normalizing the market, until further regulations are clarified.

Enforcement remains contingent on upcoming rules, fueling concerns that activity could stay informal despite regulatory intent.

For major harms, losses above 3.5 million rubles or 13.5 million rubles are designated as major or particularly serious, carrying harsher consequences.

Cross-border provisions exist but are classified for national security, reflecting geopolitical considerations amid sanctions and a global shift toward crypto regulation.

The package signals a controlled framework aimed at balancing innovation with tighter market access and monetary oversight, including a focus on cross-border use rather than domestic payments.