Russia’s requirements to declare cash when leaving the country and limits on the export of foreign currency do not apply to the crypto holdings of people traveling abroad, a legal analyst has clarified as the summer season peaks.
The exemption is largely due to financial regulators stubbornly refusing to accept Bitcoin and the like as currencies in Russia, where such digital assets are currently recognized merely as property and are yet to be properly regulated.
Russians are free to travel with crypto in their wallets
Summer is in full swing, and many Russians are wondering how much and what kind of money they can take with them as they head toward popular resorts in top destinations like Turkey and even Vietnam, which is emerging as a new favorite this year.
As in other jurisdictions, certain reporting obligations exist for cash that travelers bring in their pockets and purses when leaving their country. In Russia, if the amount exceeds the equivalent of $10,000 U.S. dollars, it must be declared to customs officials.
The threshold total includes not only paper money but also traveler’s checks, Evgeny Pantaziy, a member of the Association of Lawyers of Russia (ALRF), reminded in a report by the RIA Novosti news agency on Sunday.
Declaring the money is mandatory for private individuals upon both exiting and entering the Russian Federation, the legal commentator emphasized.
There is no need, however, to announce balances in either bank cards or cryptocurrency wallets, Pantaziy noted, elaborating:
“Cryptocurrency is not declared because it is not cash or traveler’s checks.”
At the same time, the lawyer warned that exporting foreign fiat currency in excess of $10,000 has been temporarily prohibited by Russian authorities.
The limit Pantaziy was referring to was imposed by Russian regulators following the launch of Moscow’s full-scale invasion of Ukraine three years ago.
The measure was imposed to reduce the flight of hard currency at a time when Russia found itself targeted with Western sanctions, including financial restrictions and asset freezes.
The latter has had a serious impact on the Russian state, including its military effort. According to a recent estimate by the U.K.’s Foreign, Commonwealth & Development Office (FCDO), sanctions have deprived Russia of at least $450 billion that could’ve been used to fund the war.
“This figure includes $154 billion in lost oil tax revenues, primarily due to the widening discount between Urals crude oil (Russia’s benchmark) and Brent crude oil (the global benchmark), which reduced the taxable value of Russian oil exports,” the British government highlighted in a summary, adding:
“The estimate also includes approximately $285 billion in immobilized Central Bank of Russia foreign currency reserves held in EU and G7 institutions.”
And that does not even count private Russian assets that have been frozen abroad, which amount to at least $58 billion in the United States alone.
Russia yet to comprehensively regulate crypto
Meanwhile, the powers that be in Moscow are yet to make up their minds about decentralized digital currencies like Bitcoin and adopt comprehensive regulations.
On the one hand, financial authorities permitted the use of digital coins for cross-border settlements to help Russian companies deal with restrictions in foreign trade.
On the other, any crypto payments inside the country are strictly prohibited under the law “On Digital Financial Assets” which went into force in 2021. A package of more recent legislative amendments further tightens the noose on crypto-related transactions.
For now, cryptocurrency has been recognized mainly as property, for example, for the purposes of criminal proceedings, including asset seizure, under Russia’s criminal code.
While allowing controlled and limited investments in crypto derivatives, the Bank of Russia remains vehemently opposed to the free circulation of cryptocurrencies in the nation’s economy, especially their use as legal tender.
Nevertheless, crypto assets in Russian accounts have been growing and have already exceeded $25 billion, according to a recent estimate quoted by Cryptopolitan in June, while Russians have continued to use them for international payments as a means to bypass war-related barriers.
