Russia is ready to legalize cryptocurrencies, but there's a problem

Other parts of the bill have not changed since its original form. It sets strict licensing standards for cryptocurrency exchanges and limits the amount of cryptocurrencies that can be traded by ordinary residents.

The country will also create a registry of all entities that trade cryptocurrencies within its borders, including persons and exchanges.

Cryptocurrency mining is the main focus.

In addition to trading, the law proposes to create a record of crypto mining businesses in the country. The bill would tax the mining industry by excluding it from the murky areas of the law and placing it under government oversight.

Given the huge potential for Russia to become a mining hub, some Russian ministers have called for the space to be legalized. The two main attractions are cheap electricity and a cold climate.

However, it is not clear that the state will support offshore cryptocurrency trading, considering that Western countries have already imposed cryptocurrency restrictions on Russia. Ksenia Yudaeva, a member of the Central Bank of Russia, reportedly said that the bank sees limited prospects for using cryptocurrencies to evade sanctions.

Russia's foray into cryptocurrencies follows some of the toughest economic sanctions imposed on Moscow, which have severely hampered economic growth.