Strict Experimental Regime Zone: Russian authorities move forward in resolving the crypto trading dilemma

Sanctions and the cryptocurrency dilemma

Finance Minister Anton Siluanov said yesterday that the Ministry of Finance and the Central Bank are ready to launch a cryptocurrency exchange for super-qualified investors, and that this would mark the beginning of bringing crypto operations in Russia out of the shadows. In fact, since 1 September 2024, Russia has had the legal provision for an experimental legal regime (ELR), allowing the use of cryptocurrency for settlements under foreign economic contracts. Its launch requires a separate act by the Bank of Russia, which has not yet been published. Nevertheless, according to our information, actual actions within the framework of the experimental regime are already taking place, meaning the experiment is, in all likelihood, already 'unofficially' underway.

ince the imposition of sanctions in 2022, Russia’s cross-border financial flows have come under strict control. The disconnection of several banks from SWIFT, the reluctance of foreign financial institutions, even from 'friendly' countries, to work with Russian clients, rising commissions, and delayed payments have all made international settlements for both Russian exports and technological imports difficult and unpredictable. To ease the pressure from these restrictions, the Russian government instructed the Ministry of Finance, the Central Bank, Rosfinmonitoring, and other agencies back in 2022 to develop a mechanism for cryptocurrency-based settlements.

Cryptocurrency allows the classic SWIFT infrastructure to be bypassed and has, in practice, long been used to evade sanctions. Transfers can be made directly between crypto wallets without the involvement of banks. This reduces the risk of blockages, simplifies payment logistics, and saves on commission fees. According to representatives of the Industrial Mining Association, cryptocurrency is an alternative both to SWIFT and to Russia’s System for Transfer of Financial Messages (SPFS) when a foreign bank is unwilling to work with Russia.

In this context, stablecoins pegged to the dollar (such as USDT) are particularly effective. Their exchange rate is stable, transfers are fast, and commissions are minimal. However, stablecoins also have an 'unpleasant' downside: since they have an issuer, such assets can be blocked at the request of regulators, especially if they are used in sanction-sensitive operations. A relevant example is the Garantex exchange – a platform previously registered in Russia and widely used for circumventing transactions. In 2022, it came under sanctions from the US Treasury's Office of Foreign Assets Control (OFAC) and was later accused of facilitating the financing of illicit transactions.

Despite this, billions in cryptocurrency, including payments for imported electronics, often through stablecoins, have been processed via such platforms. As a result, the Bank of Russia, which had previously consistently criticised cryptocurrency as a means of payment, began to allow its use under 'laboratory' conditions, that is, through the Experimental Legal Regime (ELR) mechanism. In the summer of 2024, First Deputy Chairman of the Central Bank Vladimir Chistyukhin stated non-standard payment instruments were a necessity without which export-oriented businesses could face a crisis. 'If there are no proper settlement mechanisms for foreign trade transactions, for our country, dependent as it is on both exports and imports, that would be catastrophic,' he said.

At the legislative level, provisions were adopted permitting the Bank of Russia to initiate an experiment in the field of digital innovation in the financial market starting from 1 September 2024. In March 2025, the Central Bank submitted its proposals to the government regarding the regulation of cryptocurrency investments.

How the experimental regime works

The experimental regime is designed to last for three years and involves the use of private cryptocurrencies for cross-border settlements during this period (in contrast to digital financial assets and the digital ruble). Officially, it remains prohibited to accept cryptocurrency as a means of payment within the territory of the Russian Federation, but an exception has been made within the Experimental Legal Regime (ELR) for foreign trade transactions (this is explicitly stated in the ELR law). The use of digital currencies in domestic settlements is not provided for by law, although theoretically, a mechanism could be created allowing companies engaged in foreign economic activity to purchase cryptocurrency from miners.

Companies wishing to participate in transactions under the ELR must submit an application to their servicing bank, which then coordinates it with the Central Bank. Once approved, the company gains access to a special settlement platform. Through this platform, a wallet is opened, rubles are exchanged for cryptocurrency (for example, mined by Russian miners), and the payment is then made to the foreign partner. All operations are subject to KYC checks and are recorded. It is expected that Russian mining companies, legalised from November 2024, will be involved in the system to ensure liquidity.

As previously mentioned, although the Central Bank’s act launching the ELR has not been officially published, according to our information, the experiment is already being conducted behind closed doors. This aligns with the regulator’s deliberate policy. 'Due to the existing risks of sanction pressure on ELR participants, information about its establishment and implementation is not disclosed,' the Central Bank said in response to an official enquiry regarding the regime's current status (the response is available to the editorial office). 'Interested parties may submit a request to the Bank of Russia to participate in the ELR.' The Central Bank does not disclose the participants, transaction volumes, or the platforms used for settlements.

The Central Bank’s proposals refer to 'highly-qualified investors' whose investments in securities and deposits exceed 100 million rubles, or whose income in the previous year exceeded 50 million rubles. Those falling within these criteria will be able, under the supervision of the Central Bank, to invest in cryptocurrency. In reality, the new regime is intended to cover large-scale foreign trade transactions, particularly those involving importers of sophisticated equipment, including dual-use goods.

Companies are obliged to use approved platforms, undergo compliance checks, and operate through rubles, which are then converted into cryptocurrency. There is reason to believe that this will involve bitcoin mined in Russia or stablecoins. The routes of these tokens are tracked, and thus such coins may be marked as associated with Russia, potentially undermining their credibility among recipients.

Given the increasingly stringent policies of issuers of popular stablecoins, such as Tether (USDT), which can freeze assets at the request of law enforcement agencies, there is growing discussion in Russia about moving away from centralised foreign digital currencies. They may be replaced either by new independent stablecoins issued within friendly jurisdictions, or by special settlement tokens created under the control of states. Discussions on the creation of such a digital currency for cross-border settlements are already underway within the BRICS bloc.

The key threats are not so much legal as operational and financial risks.These include compliance barriers (such as partners’ reluctance to accept crypto payments from Russia), sanctions against platforms, and technical failures. However, legal risks are also significant: claims and fines from regulators in counterparties' countries are possible. Compliance is particularly challenging: in countries with strict regulators, banks often refuse to engage with any Russian crypto transactions. Meanwhile, there are states where such restrictions are minimal or largely formal. As a result, companies often route settlements through intermediaries based in the Middle East, Asia, and Latin America.

However, this carries additional risks: weak regulatory oversight, instability, and a high risk of fraud. Furthermore, using such channels could provoke claims against these countries from the United States, the EU, and other international partners, especially if the transaction chain involves 'grey' zones, sanctioned entities, or military-grade goods.

Experimental regime as a tool for control and monopolisation

So far, the experiment has been perceived by businesses as a positive step: it has provided an opportunity to conduct transactions that were previously impossible. The Central Bank reported interest from participants and the beginning of the first transactions as early as autumn 2024, although no official confirmation or open data regarding specific transactions has yet been presented, making it difficult to assess how extensive or stable the pilot implementation is.

The Ministry of Finance emphasises that this is not an alternative to traditional channels, but rather a safety net. The main question remains open: what will happen to platforms that already operate outside the ELR, whether they are legal business structures or ‘grey’ crypto exchanges that have historically provided foreign economic settlements in cryptocurrency? Many of them have operated for years by bypassing sanctions and banking restrictions and, in fact, they became the foundation for today’s 'unofficial' ELR.

When the Bank of Russia officially launches it, it is almost certain that the next step will be the consolidation of the infrastructure and its subordination to state control. Even now, Rosfinmonitoring openly talks about the need to establish regulation for VASPs (virtual asset service providers, according to FATF terminology), meaning cryptocurrency exchanges and brokers. Moreover, in its proposals regarding the experimental regime, the Central Bank notes: 'The Bank of Russia still does not recognise cryptocurrency as a means of payment, and therefore proposes simultaneously introducing a ban on settlements between residents involving cryptocurrency outside the ELR, as well as establishing liability for violations of the ban.'

Following the adoption of the ELR legislation, the authorities swiftly advanced initiatives aimed at transferring information regarding cryptocurrency ownership to law enforcement agencies, introducing licensing requirements for cryptocurrency exchanges, and mandating the registration of all transactions. As reported in detail by RBC, this effectively signals the intention to establish a comprehensive system of oversight over digital assets. Furthermore, a digital platform designed to facilitate the de-anonymisation of cryptocurrency users is currently being developed with the involvement of the Ministry of Digital Development and the Central Bank. Accordingly, if the ELR is officially launched and subsequently expanded, all crypto service providers – from fully legitimate actors to 'grey market' intermediaries –will be faced with a stark choice: to integrate into the state-regulated system or to face the risk of being blocked. This requirement will extend to platforms, miners, and brokers alike. De facto, Russia may transition towards a stringent model of cryptocurrency regulation, in which every transaction must be recorded and all participants must undergo Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance procedures.

Thus, the experimental regime seeks to address two fundamental challenges: firstly, to support and expand avenues for conducting trade outside the traditional infrastructure of international settlements, and secondly, to establish strict enforcement-based control over the crypto sphere. Existing platforms may be compelled either to integrate into the official system or to terminate operations, a development that would particularly affect unlicensed services. Looking ahead, it is conceivable that all operators will be subject to centralised registration and mandatory KYC and AML procedures, even beyond the scope of the ELR. While this would enhance transparency and facilitate the participation of large-scale businesses, it would also increase operational costs and lead to the displacement of 'grey market' participants.

Thus, the ELR represents not merely a temporary experiment but a potential foundation for the restructuring of the entire model of cryptocurrency settlements in Russia and their integration into international trade. It demonstrates Russia’s efforts to construct a parallel financial system – circumventing sanctions, the dollar, the euro, and the global banking network – while simultaneously laying the groundwork for the establishment of comprehensive state control over digital transactions.