Mendeleev: “Cryptocurrency exchange now exclusively through depository”, 2026/03/29 04:08:13

Opinion A bill aimed at regulating cryptocurrencies in Russia has been drafted based on the framework of stock market regulations, which suggests that the new rules may not be effective, according to Exved CEO Sergey Mendeleev.

Recently, the crypto entrepreneur shared the text of a document titled “Federal Law on Digital Currency and Digital Rights” on his Telegram channel “Mendeleevshchina.” The proposal suggests establishing a system of cryptocurrency operators under the control of the Central Bank of Russia and restricting transactions outside this framework.

Mendeleev noted that he was involved in discussions regarding the future regulations of state control. Consequently, the magazine Bits.media interviewed him about how the regulation might appear if the law is adopted in the version published by “Mendeleevshchina,” and what effects to expect from the approach currently being pursued by lawmakers.

Greetings from the Stock Market

— According to the draft law, all cryptocurrency trading in Russia must occur through digital depositories. This applies to every transaction made by individual investors. What is the purpose of having an organization similar to those in the stock market within the crypto sector?

— It is essential to understand that the individuals drafting the law from a specific department of the Central Bank have little to no understanding of cryptocurrency. They are creating legislation based on templates from the financial market. In the stock trading market, there is a concept of a depository — they have decided to transfer this idea here, simply renaming it as a crypto depository. This means that cryptocurrency is treated similarly to a metal account at Sberbank. You only see numbers, and that’s it. If you need to transfer this cryptocurrency somewhere, you must report to the crypto depository about the transfer: what the transfer is for, where you are sending the asset, and why.

Then, you sign the transaction with two keys. One key is yours, and the other belongs to the crypto depository. It is assumed that the crypto depository does not actually have your key. If you happen to lose your key, then the crypto asset remains permanently on your wallet, which is another issue altogether.

Russian Crypto — Outside the Global Economy

— In short, if a person wishes to operate legally, there must always be an intermediary between them and cryptocurrency?

— Yes. An exchange, a trading platform — where orders are matched. A depository, a custodian — where assets are physically stored with a digital record. A broker — through whom access to trading is provided. This creates a three-part structure similar to the stock market. However, intermediaries undermine the very essence of blockchain, which implies direct ownership of the asset, while also increasing fees and bureaucracy.

The rules for obtaining licenses for cryptocurrency platforms will likely be stringent, akin to those for operators of information systems like Sberbank and Alfa-Bank or participants in the Central Bank’s experimental legal regime. This process is costly, time-consuming, and accessible only to very large players.

However, when it comes to shares of Russian companies, the Central Bank and the Ministry of Finance have complete control over the entire market. In this case, we lack a lever that they can pull down at any moment. The analogy would be if we were to create Russian laws outlining the rules for trading shares of foreign companies. For instance, shares of Apple. We could create such laws and then wonder why they do not work, why those shares do not trade according to our rules…

The same situation applies to cryptocurrency. The history will repeat itself. Those who trade crypto will prefer to disregard the laws and simply trade outside of Russian jurisdiction. Yes, even while being within the Garden Ring.

Moreover, if a Western regulator suddenly disapproves of something, given the centralization that our legislative process introduces, along with official crypto depositories and exchanges… A Western regulator could easily block everything at any moment. Such instances have already occurred, though they are not commonly discussed.

In six months to a year, all Russian cryptocurrency will find itself outside the global economy. I refer to the official cryptocurrency that will pass through pools like the Moscow Exchange. Yes, one could create their own blockchain. But who would use it? Who could transact on a domestic blockchain?… It would be better to simply issue a paper promissory note, sign it, and use that.

The only success currently noted is A7, which has issued its tokens on widely accepted blockchains, such as Tron and Ethereum. And yes, it has gained traction. Because this is not “Atomize,” which is understood by only a few people and is not utilized by anyone. The well-known blockchains are a familiar story, allowing for trading on DEX and various other activities. Yes, it has gained traction. This is certainly not the second most traded token in the world, as claimed — but nonetheless, it is being used.

However, the proposed legislative framework will not function. Moreover, it will not only fail to work but will also destroy the existing market.

Limits Are Painful

— The draft law does not specify an annual trading limit of 300,000 rubles for individual non-qualified investors, which was promised by the lawmakers. It merely states that the Central Bank will decide. How likely is such a limit?

— Limits for “non-qualified” investors are one of the most contentious issues. Individuals may face strict restrictions on the amount of cryptocurrency purchases, justified by the need to protect investor rights. In reality, this amounts to a limitation on the freedom to manage one’s own capital.

Yes, the law does not specify an exact limit, but it will certainly emerge, and the authors of the legislation cannot be swayed on this point. Even for trading CFA, there is currently a limit of 600,000 rubles for non-qualified investors. Why should the limit for cryptocurrency be lower? There are no arguments to support this.

How will this end? Market participants will simply refuse to comply. Yes, these participants will lose 10% of the market — newcomers from the street. But there are regular clients and daily turnovers in the millions of dollars. These clients will continue to trade those millions of dollars. Businesses may close offices or relocate. But then the lawmakers will have no one to approach, no one to call or write to for assistance.

This Legislation Leads to the Black Market

— There is a mention that transfers within the framework of foreign economic activity will be much freer than, for example, for a private individual withdrawing a small amount of USDT into rubles. What is the danger of the new regulation for the established method of accessing imported goods in Russia since 2022?

— An exception is clearly being made for foreign economic activity. However, the problem is that the current draft does not differentiate between stablecoins and cryptocurrencies. They need to be distinguished because all foreign economic activity is conducted through stablecoins. The draft law suggests that an importer, in order to pay for a certain Western contract of 100,000 USDT, must go through several steps. First, they must visit their bank, which is required to place this entire process under currency control. Then, they must go to an authorized organization, such as an exchange, and submit a purchase request. The authorized organization must buy these stablecoins from an official liquidity provider. The liquidity provider, in turn, must also acquire these stablecoins from somewhere — for example, from an exporter.

Do you see the chain? Each participant in this chain adds a markup of at least half a percent — or even a full 1%. As a result, these Tether coins will cost more than the Central Bank’s rate — 85 rubles instead of 80. Why is this necessary if the importer can go directly to the exporter and say: “Hey, sell me Tether for 80.” And that’s it. This is how the system currently operates. They want to break it.

Breaking it will lead, firstly, to the formation of a black market — because it is clear that horizontal connections have been established over the four years since the summer of 2022. Secondly, those without such connections will find themselves at a competitive disadvantage, forced to buy stablecoins at a 4% premium.

“Why Do You Even Need Crypto?”

— When transferring from one individual to another through a hypothetical legal Russian exchange, will it be possible to conduct the same USDT without going through the digital depository? For instance, if one acquaintance sends another 1000 USDT to a legal exchange account, and the acquaintance withdraws rubles through T-Bank. What is the purpose of the digital depository here?

— Another question is whether the bank will be willing to assist in withdrawing rubles. It’s like with a gold bar. Try to return it to the bank without receipts and documents… You need to explain the origin of the asset.

A legal exchange, indeed, will be required to send USDT to the crypto depository, to the assigned recipient address-identifier.

It’s similar to the experimental regime of the Central Bank. There, too, no one will hand you your cryptocurrency, but they will carefully send it to the specified details in the contract. And why do you need crypto? To store it? Well, we are already doing that. To send it to an exchange? Which one, tell me, can we send it to? A Western one? That’s not allowed.

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