Russia’s largest trading venue, Moscow Exchange, will begin trading bitcoin, ether and Tether’s USDT on Dec. 1, the exchange announced this week. The launch is being presented as Russia’s first organized market for digital currencies.

The move will place bitcoin on the same trading infrastructure used by Russian investors to trade shares of Sberbank and Gazprom. It will also bring a major crypto market into an institution subject to U.S. sanctions. The initial phase will operate as a pilot, with participants connecting as they become ready. Moscow Exchange said interest has come from existing members, their clients and businesses that already use digital currencies for investment and settlement.

How the Moscow market will operate

Trading will use Moscow Exchange’s existing stock-market technology and follow its equity-market hours, from 6:50 a.m. to 11:50 p.m. Moscow time, the exchange told Russian newspaper Vedomosti. That schedule contrasts with the around-the-clock trading typical of global crypto venues. The National Clearing Centre, the exchange’s clearing arm, will process every trade.

Clients will be able to settle transactions on the same day or the following day from the start of operations. The exchange will also offer swaps intended to help participants manage liquidity. BTC, ETH and USDT will be available in both addressed and addressless modes. Moscow Exchange said the range of instruments is expected to expand over time to include Russian and international assets.

Custody will be provided through partner digital depositaries, a new category of entity established under Russian rules. An executive at Moscow Exchange first previewed the plan on Oct. 31. The exchange had previously indicated that it planned to launch bitcoin trading in October.

Access for retail investors will be restricted. Non-qualified investors must pass a test before purchasing digital currency and will be limited to 300,000 rubles per year—roughly $3,700—through a single broker. Qualified investors will not face that annual limit.

The structure allows Moscow Exchange to keep crypto trading within systems it already operates. Brokers will connect in a manner similar to the process used for equities, trades will be netted through the existing clearing system, and investor classifications will carry over from the stock market. This could allow banks and brokerages to offer bitcoin without creating separate custody and trade-matching infrastructure.

Sanctions raise questions about USDT

The U.S. Treasury sanctioned Moscow Exchange and the National Clearing Centre in June 2024 as part of a broader effort targeting Russia’s financial system over the war in Ukraine. As a result, the clearing house that would hold customers’ USDT is a sanctioned entity. The Treasury’s announcement is available here.

Tether routinely freezes wallets associated with addresses on the Treasury’s sanctions list. That practice raises questions about how the stablecoin issuer would handle USDT held through Moscow Exchange’s clearing structure. Neither Moscow Exchange nor Tether has publicly addressed the issue.

USDT’s inclusion is notable because the market is being developed in part to operate outside the dollar-based financial system. Bitcoin and ether, unlike USDT, do not have an issuer capable of freezing balances.

Bringing offshore activity into Russia

The market is based on Federal Law No. 282-FZ, “On Digital Currencies and Digital Rights,” whose main provisions took effect on Sept. 1. The law continues to prohibit the use of crypto for domestic payments, while allowing exporters and importers to use digital currencies for cross-border trade settlement.

Russian officials have spent the past year developing the regulatory and market infrastructure for digital assets. Lawmakers gave securities regulators oversight of crypto last month, and the central bank licensed Sberbank to conduct crypto-related work several weeks earlier.

The stated objective is to move trading that Russian users already conduct on offshore exchanges and peer-to-peer desks onto domestic, supervised platforms where it can be monitored and taxed. Moscow Exchange’s existing relationships with Russian brokers are intended to support that effort.

Questions remain over whether the testing requirement and annual retail cap will keep some traders on offshore platforms, and whether foreign liquidity will participate in a sanctioned venue. As the pilot gets underway, the pace at which brokers connect and whether the instrument list expands as the exchange has indicated will offer early indications of how much trading activity moves onshore. For now, Russia’s first organized bitcoin market is scheduled to open on Dec. 1 as a pilot program with a 300,000-ruble annual limit for non-qualified investors.

Bitcoin Magazine first published this report. It was written by Micah Zimmerman.