According to reports from Russian news agency Interfax, Deputy Finance Minister Vladimir Kolychev stated in an interview that the ministry does not intend to adjust the investment allocations of the National Welfare Fund (NWF) or include cryptocurrency assets.
Vladimir emphasized: "Due to their high volatility, the fund's current accumulated size is insufficient to undertake high-risk investments. Gold and the Chinese yuan remain the fund's primary investment targets."
Under Russia's NWF investment framework, the yuan can account for up to 60% of holdings, while gold may comprise 40%. When asked whether Russia would emulate the U.S. Trump administration's proposed "cryptocurrency strategic reserve," Kolychev responded directly: "I haven't heard of such discussions—this would fall under the Russian Central Bank's purview."
Cryptocurrency Volatility Conflicts With Fund's Stability Principles
Kolychev elaborated that as Russia's fiscal reserve, the NWF must ensure asset liquidity and stability, enabling swift liquidation when necessary without losses from extreme market fluctuations. He illustrated: "We aim to invest 1 ruble and recover at least 1 ruble in the future, not just 0.5 rubles. Cryptocurrencies' volatility makes them incompatible with this principle."
He added that the fund's current size hasn’t reached a threshold for high-risk investments. Per the ministry's strategy, only when the fund grows to 7–10% of GDP will it consider allocating portions to less liquid but potentially higher-yield assets. Until then, low-risk, high-liquidity instruments will dominate, ruling out cryptocurrencies in the near term.
Russia's Current Stance on Bitcoin
Russia maintains a "pragmatic yet controlled" approach toward Bitcoin: permitting its use in international trade and mining to counter sanctions and economic demands, while banning domestic payments and enforcing strict oversight via taxation and regulation.
- August 2024: President Putin signed legislation allowing businesses to use Bitcoin and other cryptocurrencies in international trade to circumvent Western sanctions. Effective September 2024, pilot transactions commenced by year-end.
- November 2024: Russia officially recognized Bitcoin mining as a legal activity, enabling registered businesses and individuals to participate.
Restrictions:
Bitcoin cannot be used as payment within Russia. Under the Digital Financial Assets Act (updated 2024), the Central Bank upholds the ruble as the sole legal tender, classifying Bitcoin as property—not currency—and prohibiting its use for goods or services.
FAQs
Why won’t Russia add Bitcoin to its National Welfare Fund?
Due to Bitcoin's high volatility, the fund prioritizes stability and liquidity to safeguard reserves. The current NWF size also limits high-risk investments.
Can Russian businesses use Bitcoin internationally?
Yes. Since September 2024, companies can use Bitcoin for cross-border trade under a legal framework designed to bypass sanctions.
Is Bitcoin mining legal in Russia?
Yes. Since November 2024, registered entities and individuals may legally engage in Bitcoin mining.
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What’s Russia’s stance on domestic Bitcoin payments?
Prohibited. The Central Bank bans Bitcoin as payment, enforcing strict ruble-exclusive policies for internal transactions.