Bank of Russia targets self-hosted wallets and Tether arbitrage

The Bank of Russia has announced plans to prohibit residents from conducting cryptocurrency transactions using self-hosted, or non-custodial, wallets starting in July 2027. This move aims to increase regulatory oversight by forcing crypto activity through supervised intermediaries where users do not hold their own private keys.

In a separate but related crackdown, Russian banks and the central bank have begun targeting an arbitrage scheme involving the stablecoin Tether (USDT). Traders have been acquiring Tether in neighboring Commonwealth of Independent States (CIS) countries, such as Belarus or Kyrgyzstan, and selling it for cash at a premium within Russia. While industry experts note the practice is technically legal, monetary authorities view the scheme as a high risk for money laundering due to the difficulty in verifying the sources of funds.