Russia's State Duma has passed a government-backed bill on the regulation of digital currencies in its first reading, with the legislation set to come into force on July 1 if approved, state news agency TASS reported on April 21.

The bill defines new concepts including the circulation of digital currencies and digital rights, and the organisation of their circulation, setting out which entities can legally operate in the market in Russia.

The legislation establishes rules for market access by digital currency operators, sets out requirements for them and defines the rules and conditions under which Russian residents can conduct transactions with digital currencies. The range of permitted transactions will depend on the type of investor.

A simplified access process is proposed for entities already operating under the Bank of Russia's experimental legal regime. Banks and brokers would also be granted simplified authorisation to operate as digital currency exchange organisations.

The Bank of Russia is designated as the regulator responsible for the admission, oversight and supervision of digital currency and digital rights operators.

The bill recognises digital currency as property, establishes a ban on its use for payment of goods and services within Russia, but allows its use in foreign economic activity.

Digital currency exchanges, brokers, asset managers and digital depositaries holding Bank of Russia licences will be permitted to organise the circulation of digital currencies and digital rights. The bill also regulates digital currency mining using Russian information infrastructure.

The bill admits only licensed professional participants to the market under Bank of Russia supervision. 

The legislation introduces a division of investors into qualified and non-qualified categories.

Non-qualified investors will be able to carry out transactions in limited volumes, protecting ordinary citizens from losing their savings on the volatile market. The entry threshold will not be lowered for experienced investors with confirmed status.

Mining is to become a legal activity subject to clear rules including the use of Russian infrastructure and the registration of equipment and currency produced.

If passed, the bill will come into force on July 1, 2026, except for provisions with different effective dates.