Once more, Elvira Nabiullina, the Governor of the Russian Central Bank, has made a case for a total prohibition of cryptocurrency settlements in the country. Speaking at a press conference on March 21, 2025, Nabiullina justified her position, which seeks to prevent the financial usage of Bitcoin (BTC) and Ethereum (ETH) as much as possible. Her proposal seeks to contain cryptocurrency activity within the bounds of an experimental legal regime (ELR) while advocating for criminal punishment against violators of the prohibition.
Ban on Russian Crypto by Russian Central Bank: The Legislative Initiation of Criminal Liability
As reported by the russian media outlet RBC, Nabiullina was quoted for her most recent comments which, as every other, noted the necessity for the government to formulate a criminal “offence” for those who undertake crypto operations beyond the regulated ELR. Such a shift in law would set prosecution for crypto settlements in severe boundaries.
Russian Central Bank officials are firm with their negative stance on the cryptoeconomy, as restictions such as the prohibiton of payment settlements in the said currency clearly indicate.
“We stick to our original view that cryptocurrencies should not be used as a means of payment,” Nabiullina said. “This is why we recommend instituting a prohibition of settlements in cryptocurrency by residents outside the ELR. We do not only recommend instituting a ban, but also a punishment for disobeying the prohibition.”
This policy also seeks to protect the general population from engaging with a rapidly developing market and the utilization of these assets as payment alternatives.
THE ELR: A Regulatory Sandbox for Crypto
Elvira Nabiullina, who is openly critical of cryptocurrencies, is letting certain cases slide under the Experimental Legal Regime (ELR), a regulatory sandbox aimed towards innovation. Within this framework, Russian companies, especially those in cryptocurrency mining, are permitted to mine and sell their coins, but only for a select group of ‘qualified investors.’ These transactions, however, are classified within a restricted boundary.
It is clear that the Russian government and Russian Central Bank has sympathy for blockchain technology, even if it is contrived on the condition that certain rules are applied. In fact, some officials are actively trying to enable the use of digital currency for foreign trade, especially given the amount of sanctions Russian firms are facing.
Geopolitical Tensions and a Domestic View of Shifting Power
The discussion around cryptocurrency regulation is clearly not a ‘glass box’ issue, it rather interlinks with numerous global geopolitical issues. Shokin, head of Russian Union of Industrialists and Entrepreneurs, recently made a statement urging the government to be more perceptive towards cryptocurrencies, especially with the US strategy of hoarding Bitcoin and Ethereum.
“Like I said previously, after Trump claimed the US would turn into the world’s crypto capital and stated accumulating reserves in Bitcoin and Ethereum, we ought to regard this development in a particular manner,” said Shokhin during his interview with TASS.
It comes as no surprise that Russia will also be igniting discussions surrounding the use of digital currencies for international trade, especially when factoring in the growing interest in cryptocurrencies from other nations as potential reserve assets.
Discrepancy Among Russian Officials
Shokhin’s arguments do stand, though, there is still massive disagreement among the Russian authorities on this issue. On the one side, the Ministry of Finance seems more progressive and has floated the idea of introducing ‘super qualified’ investors enabled to trade in crypto on the Moscow Exchange while on the other side it is still headed by Nabiullina who fiercely opposes crypto.
Whatever the case, Nabiullina has made no secret of her position that under no scenario should the crypto assets be part of the Russian Central Bank reserves. The reason she takes such a stance, which many others in her camp share, is to shield and protect retail investors from the risks that’s perceived to be posed by cryptocurrencies. Those assets she views and many in her camp consider too speculative and risky beyond reason.
A Controversial Question for Russia: The Answer
When it comes to the Russian regulations on currencies, the answer is still up for discussion as recently the controversy hasn’t been resolved. There are politicians from the crypto sector and the business elite who want to soften some tight regulations, while within the Russian Central Bank, the opposition remains strong, led by Nabiullina, who makes sure that no liberalization is made. The growing geopolitical conflict is creating a situation where the Russian crypto regulation will become one of the controversial topics that will affect the Russian economy and how it impacts the world of cryptocurrency.
As for now, it appears Russia still hasn’t decided on crypto regulations but it is most likely that the current position is bound to become more relaxed. Keep following Turkishnyradio and keep an eye on Russian Central Bank crypto ban.
FAQs
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What is the Experimental Legal Regime (ELR) in Russia?
The Experimental Legal Regime is a regime type of sandbox used for innovation, sometimes referred to as work-in-progress marketing. Within the ELR, any business can be conducted, but the ranges of activity are confined, and they need to comply with state legislation.
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Why is Russian Central Bank Governor opposed to cryptocurrencies?
Elvira Nabiullina has long maintained that since they are very sensitive, broad-based use of cryptocurrencies should not be allowed and as a payment method, it should be prohibited. She has frequently claimed that all crypto trading in Russia should be prohibited.
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What did Alexander Shokhin propose regarding cryptocurrencies?
Alexander Shokhin, head of the Russian Union of Industrialists and Entrepreneurs, proposed Russia considering the possibilites for usage of cryptocurrencies in international commerce, in particular after the US started diversification of strategic reserves by accumulating Bitcoin and Ethereum.
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How does the U.S. influence Russia’s stance on cryptocurrencies?
The decision of the US to accumulate amounts of bitcoin and ethereum certainly has spurred attention in Russia and has already led some officials to start changing thier stance towards crypto currencies. It was Shokhin’s comments that suggested Russia is likely to be too late in changing policies.
Glossary of Key Terms
Crypto-ban: Prevention of the use of crypto as means of payment or commerce.
Central Bank: The entity in charge of the leadership of monetary affairs of a nation.
Experimental Legal Regime (ELR): An overarching legal set of rules for the control and experimentation of new innovations.
Super-qualified Investors: A suggested class of investors that might be permitted to engage in cryptocurrency trading in Russia under specific circumstances.
