Russian Public Chamber legislative expert Yevgeny Masharov proposed establishing a national crypto bank in Russia to legalize underground transactions, boost federal revenue, and combat illicit activities.

The Proposal in Detail

Yevgeny Masharov, a member of the Public Chamber of the Russian Federation, proposed the establishment of a national crypto bank in Russia. Masharov stated, "A Russian crypto bank would solve several existing problems. It would bring hundreds of billions of rubles worth of [crypto] transactions out of the shadows." This initiative aims to increase federal tax revenue and provide a regulated environment for Russian crypto miners, who currently lack domestic infrastructure to sell their coins. The initiative intends to combat remote fraud, prevent criminal financing, and monitor the flow of funds to mitigate tax evasion. Masharov argued that confining digital asset activity to a government-regulated bank could "strike a blow against online fraud." The proposal also addresses Russia's economic sanctions, suggesting the bank could facilitate cross-border crypto trade and generate new revenue for the federal treasury.

Strategic Alignment and Precedent

The proposed national crypto bank aligns with Russia's nuanced approach to digital assets. While domestic crypto transactions for goods and services remain restricted to preserve the ruble's status, Russia has allowed crypto for international trade since 2024. Masharov highlighted Belarus as a regional precedent, noting Minsk's development of a regulatory framework for a national crypto bank, described as "the first of its kind on the territory of the former Soviet Union." Belarusian President Aleksandr Lukashenko has actively promoted crypto-related industries. The Bank of Russia has independently proposed a phased plan for integrating digital assets by banks, focusing on institutional access for qualified investors and aiming to regulate the market without granting direct asset custody to retail investors.

Broader Market Implications

The establishment of a national crypto bank would fundamentally reshape the Russian crypto landscape by formalizing a legal channel for transactions. This could lead to a significant increase in federal tax revenue by integrating previously untaxed crypto activities into the legal economy. The initiative is expected to enhance efforts against financial crime by providing a controlled environment. Blockchain technology's transparency offers an unalterable record of transactions, making it difficult for illicit activities to evade monitoring. Paul Grewal, Chief Legal Officer at Coinbase, noted that the traceability of blockchain empowers authorities to detect suspicious activities. For Russian crypto miners, a regulated platform would offer a secure marketplace, potentially fostering investment and development within the region's mining sector. Long-term, Russia's pursuit of a state-backed crypto bank could serve as a model for other nations navigating the integration of digital assets into traditional financial systems, particularly those seeking to balance innovation with stringent regulatory oversight and revenue generation. The proposal reflects a growing global trend towards more centralized control over cryptocurrency ecosystems.