In response to financial pressure from Western sanctions, Russia approved a new law allowing the use of cryptocurrencies for international payments. This legislative change is expected to reshape the cross-border trade pattern of Russian companies, which previously prohibited payments with cryptocurrencies in Russia.
Russian lawmakers approve cryptocurrencies for cross-border trade
On Tuesday, Russia’s parliament (State Duma) gave preliminary approval to a new law that would let companies use cryptocurrencies for international transactions. The decision comes as Russia faces increasing financial restrictions from the West. "We have made a historic decision in the financial sector," the speaker said.
Countries under sanctions tend to be crypto-friendly
Mati Greenspan, CEO of crypto market research firm Quantum Economics, highlighted the practical advantages of Russia’s move to cryptocurrencies.
He noted that Bitcoin transactions are not censored or blocked by any government or bank. Mati Greenspan added: “Given the widespread use of Bitcoin in everyday commerce, Russia now desperately needs this freedom of transactions.”
(U.S. Treasury Department: Russia uses USDT to evade sanctions, Congress urgently needs to expand regulatory authority)
Russia resists pressure from Western sanctions
The United States, the European Union and the United Kingdom imposed widespread sanctions on Russia following its invasion of Ukraine in February 2022. The sanctions target Russian President Vladimir Putin, Russia's financial sector and numerous oligarchs. The continued tightening of these sanctions has pushed Russia to seek alternative financial systems.
The Central Bank of Russia will introduce cryptocurrency trading starting at the end of 2024!
In response, the Russian central bank is now allowed to use private digital currencies for international transactions. Cryptocurrency-based payments will begin by the end of 2024, the central bank governor announced. This marks a significant shift from the central bank’s previous stance of seeking to ban cryptocurrency trading, citing concerns over financial stability and monetary policy sovereignty.
Implementation of the CBDC Digital Ruble
In addition to embracing cryptocurrencies, Russia is also exploring a digital version of the ruble. The central bank governor mentioned that the central bank plans to transition from the pilot phase to large-scale implementation of the digital ruble by July 2025. Unlike decentralized cryptocurrencies such as Bitcoin, central bank digital currencies (CBDC) are issued by governments and replicate fiat currencies in digital form.
Can cryptocurrencies help countries evade sanctions?
Quantum Economics said Russia’s adoption of cryptocurrencies makes sense from a global trade perspective and could facilitate cross-border payments with countries and businesses restricted by U.S. sanctions.
Other sanctioned countries, such as North Korea and Iran, have also turned to cryptocurrencies to bypass financial obstacles. North Korea, for example, has been accused of using cryptocurrencies to finance state programs and evade sanctions.
This article Russia fights sanctions! The central bank will allow companies to use cryptocurrency for global payments by the end of 2024. The article appeared first on Chain News ABMedia.