Russia Builds Cryptocurrency Infrastructure Amid Sanctions

Russia is building its own cryptocurrency infrastructure and adopting new regulations in response to Western sanctions. Sber, Russia's largest lender, plans to launch a digital depository for cryptocurrencies by December 1, which will register ownership rights and process transactions off-chain.

The move comes as the European Union intensifies pressure on Russia with its 21st sanction package against the country. The package targets over a dozen cryptocurrency firms, including HTX (formerly Huobi), which is accused of helping Russia circumvent sanctions through crypto payments.

A new law adopted by the Russian parliament grants sweeping powers to the central bank to oversee the cryptocurrency market, including determining which assets may be offered through licensed intermediaries. The law also establishes five categories of regulated market participants and allows for cross-border settlements using cryptocurrencies for exporters and importers.

However, the rules are tighter for regular users, who will only be able to conduct transactions outside Russia with foreign bank accounts and report them to tax authorities.