A senior Russian official wants Moscow to launch a state-controlled cryptocurrency bank, arguing it could transform billions of rubles worth of shadow transactions into legitimate revenue streams while cracking down on financial crime. The proposal follows Belarus’s successful model, where cryptocurrency exchanges have generated over $1.7 billion in payments this year alone.
Evgeny Masharov, a member of Russia’s Civic Chamber, told state news agency TASS that establishing a national crypto bank would solve multiple pressing issues facing the country’s digital asset sector. The institution would bring illicit cryptocurrency transactions worth “hundreds of billions of rubles” into the legal framework, significantly boosting federal budget revenues.
The proposed bank would specifically target fraud schemes involving “droppers” – money mules who launder criminal proceeds through cryptocurrency wallets before converting them into luxury goods and real estate.
Russian authorities struggle to track these transactions under current banking restrictions. The proposed crypto bank would mandate that all settlements occur within a regulated framework, requiring customers to use verified Russian bank accounts for fund deposits.
Masharov emphasized that regulated crypto transactions would block a major channel that criminals use to finance illegal activities and recruit Russian citizens for serious crimes against the state.
Fraud Prevention Takes Center Stage
Russia banned cryptocurrency payments in early 2022 but has gradually embraced digital assets as a tool to circumvent international sanctions imposed over its invasion of Ukraine. The country allowed financial institutions to offer crypto products to accredited investors in May and explored plans for a ruble-pegged stablecoin in April.
The crypto bank would address infrastructure gaps that currently plague Russian mining operations. Despite mining restrictions in 10 out of 46 regions implemented in January, the industry continues to thrive. However, miners lack proper channels to cash out their earnings within the country’s legal framework.
The proposed Russian institution would require all settlements to occur in cryptocurrencies, with funds credited only through the current accounts of Russian citizens. This structure would enable authorities to monitor and regulate transactions more effectively than the current system, where much crypto activity occurs outside legal oversight.
The initiative could also support Russian companies conducting international trade after the country’s disconnection from the SWIFT banking network. Many businesses have turned to cryptocurrency for cross-border payments, but this activity largely happens outside regulatory frameworks, limiting government oversight.
Regulatory Challenges Ahead
However, significant obstacles remain. The Central Bank of Russia continues to oppose legalizing the free circulation of decentralized digital currencies like Bitcoin in the domestic economy. The bank has only permitted cryptocurrency use in cross-border trade settlements within a special “experimental legal regime” designed to help sanctioned Russian companies.
Russian economist Sergey Suetin recently assessed the probability of introducing crypto payments in Russia within the next five years at just one percent, highlighting the regulatory challenges ahead.
Belarus Model Provides Blueprint
Russia’s proposal follows Belarus President Alexander Lukashenko’s recent directive to accelerate national crypto bank development. Belarus established cryptocurrency exchanges within its High-Tech Park over eight years ago, successfully integrating digital currencies into its regulated financial system.
Belarus recorded cryptocurrency payments exceeding $1.7 billion during the first seven months of 2024, with projections reaching $3 billion by year’s end. This success story motivates Russian officials seeking similar economic benefits while maintaining state control over digital currency flows.
In this evolving landscape, the Belarusian model offers not just a blueprint but a tangible roadmap for how countries under geopolitical pressure can leverage digital currencies to regain economic autonomy and resilience in a rapidly shifting global economy.
