Historically, Russia has shown an ambiguous stance towards cryptocurrencies, oscillating between cautious regulation and outright prohibition. In a shift of perspective, the Kremlin has recently warmed up to the idea of embracing crypto, particularly for international trade.
In July 2020, President Vladimir Putin enacted a regulation allowing certain uses of digital financial assets (DFAs), while prohibiting crypto as a means of domestic payment. This move laid the groundwork for banks officially recognized by the Bank of Russia to operate with DFAs. Meanwhile, a comprehensive position paper released by the Russian central bank in February 2022 highlighted the country’s strong mining capabilities but stressed the risks associated with cryptocurrencies. The paper recommended stringent measures including banning crypto creation and exchange activities, and emphasized the potential role of a digital ruble as a state-sanctioned alternative.
Despite these warnings, the restrictive recommendations have not entirely dictated Russia’s current approach. The geopolitical pressure exerted by Western sanctions has pushed the country towards cryptocurrencies as a viable option for international transactions. This strategic pivot was underscored when President Putin signed legislation in mid-2024 legalizing the limited use of cryptocurrencies for overseas commerce, while still maintaining a ban on domestic payment and advertising with cryptocurrencies.
The motivation behind this shift is twofold: bypassing financial restrictions imposed by sanctions and undermining the U.S. dollar’s dominant position in global trade. Cryptocurrencies offer Russia a means of engaging in trade that eludes sanctions, effectively challenging the dollar’s hegemony. Moreover, promoting crypto as an alternative aligns with Putin’s long-standing de-dollarization agenda, facilitating trade without relying on USD.
In addition, crypto serves the interests of Russian oligarchs affected by international sanctions. Notable figures such as Oleg Deripaska have significant investments in crypto mining operations, leveraging Russia’s energy resources and climate. The Russian Mining Company and BitRiver, associated with significant mining capacities and ties to sanctioned individuals, illustrate crypto’s integration into economic strategies aimed at circumventing financial constraints.
The current phase of softer crypto policies in Russia may be seen as a pragmatic thaw—a temporary easing of strictly prohibitive measures, offering new opportunities amid continued international scrutiny and economic pressures. The strategic adoption of crypto could signal a calculated adaptation to shifting global economic landscapes, though the long-term trajectory remains uncertain.
