The Russian Central Bank's policy shift: allowing banks to participate in the crypto market to a limited extent, paving the way for comprehensive legislation by 2026.

The Central Bank of Russia has officially authorized some commercial banks to enter the Crypto Assets market, but has set strict regulatory conditions, including capital restrictions, transparency requirements, and reserve systems, to control systemic financial risks. This decision marks Russia's transition from its previous stance of banning Crypto Assets to a strategy of "controlled acceptance." Vladimir Chistyukhin, the first deputy chairman of the Central Bank of Russia, emphasized that this initiative is a cautious choice made after consultations with the banking sector. Meanwhile, under the pressure of Western sanctions, the demand for digital financial tools in Russia's financial sector has surged, with A7A5 stablecoin growing to become the largest non-USD stablecoin, highlighting the importance of Crypto Assets in cross-border Settlement.

Policy Shift: Banks Allowed to Engage in Crypto Business Under Strict Regulation

The Central Bank of Russia, after careful assessment, has decided not to completely exclude commercial banks from Crypto Assets operations, but has set multiple "barriers" to prevent risks.

· Limited Authorization and Regulatory Conditions: Under the new framework, only a few commercial banks are allowed to engage in Crypto Assets-related business, and they must adhere to strict regulatory requirements. These restrictions include capital requirements and reserve authorization, aimed at ensuring that digital asset transactions remain at the periphery of core banking operations, limiting the overall exposure to the banking system.

· Central Bank Statement: Vladimir Chistyukhin, the First Deputy Chairman of the Central Bank of Russia, stated: "We conclude that it is unreasonable to completely exclude banks from these operations." This move is a policy consensus reached after in-depth consultations with the banking sector, aimed at allowing its development within a controllable scope.

· Compliance Requirements: All banks participating in crypto operations must strictly adhere to Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) laws. Institutions need to identify customer identities, track the sources of funds, and prevent any suspicious activities to maintain the integrity of the financial system.

Incremental Legislation: From International Settlement Trials to Comprehensive Licensing System

Russia's cryptocurrency regulation is transitioning from early restrictions to a comprehensive and formal legal framework to adapt to the changing domestic demands, especially the needs for cross-border settlement.

· International Settlement Legal Pilot: Russia has launched an experimental legal framework in early 2025 aimed at assessing the feasibility of using Crypto Assets for international Settlement.

· Participant restriction: According to the pilot framework, qualified entities must have at least 100 million rubles in deposits and an annual income exceeding 50 million rubles. Currently, only a few wealthy individuals and companies meet the participation criteria, reflecting the regulatory authority's cautious attitude of "testing the efficiency of digital settlement on a small scale."

· Accelerating the legislative process: Chistyukhin and Central Bank Governor Elvira Nabiullina are pushing lawmakers to approve a comprehensive Crypto Assets bill by the end of 2026. The proposal plans to establish a licensing system for exchanges and clarify the role of encryption service providers in Russia, aiming to formalize the growing demand for digital assets while ensuring regulatory oversight is in place.

Sanctions and the "Alternative": The Rise of A7A5 Stablecoin

Against the backdrop of ongoing global sanctions limiting Russia's access to traditional financial services and weakening the purchasing power of the ruble, the demand for digital assets pegged to the ruble has surged.

· Scale and Status: The A7A5 stablecoin issued by the sanctioned Russian bank PSB and its partners has reached a total market capitalization of 500 million dollars, making it the largest non-dollar stablecoin.

· Role in Cross-Border Trade: A7A5 operates in alternative financial channels, and despite global scrutiny, its issuer insists that it operates legally under the regulatory framework in Kyrgyzstan. Executive Oleg Ogienko stated that the stablecoin plays an increasingly important role in cross-border trade, claiming it has facilitated billions of dollars in trade for Russian companies.

· Regional Adoption: Ogienko stated that A7A5 is being rapidly adopted in Asia, Africa, and Latin America. Currently, Russian regulators have not confirmed whether they plan to restrict the use of this stablecoin under the new rules.

Conclusion

The Russian Central Bank has opened the encryption market to commercial banks, a result of global geopolitical pressures and domestic demand for alternative financial instruments. This policy shift, from an initial "complete ban" to the current "controlled acceptance," demonstrates that the strategic value of Crypto Assets in circumventing sanctions and enhancing cross-border Settlement efficiency is being recognized by the Russian leadership. With the advancement of the comprehensive encryption legislation in 2026, Russia is expected to establish a strict but formal framework for encryption finance. However, balancing compliance requirements with the use of digital assets like A7A5, which have emerged under sanctions, will be a core challenge for its future regulation.

Disclaimer: This article is for news information only and does not constitute any investment advice. The crypto market is highly volatile, and investors should make cautious decisions.