An announcement on Tuesday indicated that the Russian government and central bank had reached an agreement on how crypto assets would be regulated.
As part of a plan to launch its digital financial assets on Feb. 18, the Russian government and central bank are currently working on a draft law that defines crypto assets as "analogs of currencies."
Crypto assets would function in such a sector only if they were fully identified through either the banking system or licensed intermediaries.
The Russian newspaper Kommersant reported that Bitcoin transactions and cryptocurrency possession are not prohibited in the country, but they must be conducted through a "digital currency exchange organizer" (a bank) or a peer-to-peer exchange with a Russian license.
It also points out that cryptocurrency transactions exceeding 600,000 rubles ($8,000) must be declared; otherwise, they could be viewed as criminal acts. People who accept crypto as payment illegally will incur fines.
Russian officials have been speculating for months about how they will handle digital currencies.
Russia is slowly warming to the idea of cryptocurrencies even though it is still unclear what this decision will mean for businesses and citizens.
Earlier this year, the Bank of Russia warned of the speculative nature of crypto in a report that called for a nationwide ban.
As part of the proposal to ban digital assets, the bank also stated financial firms won't be allowed to facilitate crypto transactions.
The Russian Ministry of Finance, however, opposed the proposal. Ivan Chebeskov, a ministerial official, said that instead of banning crypto completely after the central bank called for its ban, the government should regulate it.
Russia's president, Vladimir Putin, has also stated that he supports regulations on crypto mining.