Russia should consider a crypto bank to support mining and mitigate fraud: Evgeny Masharov

A member of Russia’s Civic Chamber has urged the government to consider a national crypto bank on the rationale that it could help combat illicit transactions, support the mining industry, and help curb crypto-related fraud under state oversight. The proposal came from Evgeny Masharov, who has been serving as a member of the Civic Chamber since 2023, during an interview with the state-owned TASS news agency on Tuesday. Masharov, who frequently weighs in on policy drafts, said the time was ripe for Russia to establish a state-backed crypto bank, similar to the model adopted by Belarus, to better align the crypto sector with national interests. According to Masharov, the creation of a regulated crypto-enabled bank could help address several pressing challenges. Chief among them is the issue of illegal or untracked crypto transactions, which he referred to as “shadow transactions”, that continue to operate outside the purview of Russian financial oversight. Bringing those activities into a state-supervised framework, he argued, could help plug revenue leaks and strengthen enforcement mechanisms, all while “replenishing the federal budget’s income.” “If we do not build infrastructure now,” he warned, “we’ll continue to lose visibility into who is moving money, where it is going, and for what purpose.” But Masharov’s vision extends beyond just legal compliance. He believes such a bank could also function as an operational bridge between crypto miners, investors, and the broader financial system. Since banning crypto payments in early 2022, the country has gradually opened up to the idea of using digital assets for international trade and domestic financial innovation. In recent months, regulators have proposed frameworks that allow crypto investment for a limited class of “particularly qualified” investors, specifically those with multi-million-ruble incomes or large securities portfolios, while restricting access to the general public. Basically, this hints at a cautious approach as Russia allows crypto use in geopolitically advantageous contexts , like oil and metals trade with China and India, but keeps tight reins on domestic retail adoption. Masharov’s crypto bank idea seems to fit squarely within this narrative, as it could enable oversight and taxation without fully liberalising the sector. The mining industry can benefit from a Russian crypto bank Masharov also drew attention to the lack of infrastructure for Russia’s mining sector , which remains a powerhouse in global hash rate rankings despite regional restrictions. As of January 1, mining has been banned for six years across 10 of Russia’s 46 regions, with seasonal limits introduced in several others due to soaring energy consumption. Yet mining has continued to thrive within the country’s borders. Masharov pointed out that while miners may be producing crypto, they often face severe bottlenecks when it comes to cashing out or reinvesting their earnings, largely due to the absence of compliant financial rails. A crypto bank, he said, would offer miners a direct and regulated path to convert their holdings into rubles without relying on offshore entities or peer-to-peer platforms. Crypto bank could help combat fraud in Russia Another pillar of Masharov’s argument centred on fraud prevention. By routing transactions through a licensed and monitored crypto bank, he said, the state could gain far better visibility into suspicious activity and cut down on financial crime. “Settlements must be made in cryptocurrencies,” he explained, “but only through the current accounts of Russian citizens.” He contrasted this with the current operating model of many unregulated exchanges and OTC desks in the region, where cash deposits are made into wallets with little to no KYC, and commissions are skimmed off the top. Such opaque practices create an ideal environment for scams and money laundering, Masharov argued. Whether his proposal will gain traction remains to be seen, but in a country where crypto is both a geopolitical tool and a regulatory grey zone, Masharov’s proposal offers a balanced approach. Despite the regulatory uncertainty, the latest estimates from Statista suggest Russia’s crypto market could generate at least $2.3 billion in revenue by the end of 2025. This figure is expected to hit $3.9 billion by 2026, with more than 44 million Russians expected to engage with digital assets by the end of that year. The post Russia should consider a crypto bank to support mining and mitigate fraud: Evgeny Masharov appeared first on Invezz