Russia legalizes crypto for cross-border trade amid sanctions
Illustrative image of two commemorative bitcoins seen in front of the national flag of Russia displayed on a computer screen.
Artur Widak | Nurphoto | Getty Images
Russian lawmakers on Tuesday approved a new law permitting the use of cryptocurrency for international payments, as the country faces ongoing financial pressure from Western sanctions.
The State Duma, which is the lower house of the Russian Parliament, on Tuesday gave the initial greenlight to the new legislation, which would allow businesses to use cryptocurrencies for cross-border trade, local media reported.
“We are taking a historic decision in the financial sphere,” Anatoly Aksakov, the head of the Duma, told lawmakers Tuesday, according to reporting from news agency Reuters.
Mati Greenspan, CEO of crypto market research firm Quantum Economics, said Russia warming to crypto made sense as bitcoin transactions “cannot be censored or blocked by any government or bank,.”
“Previously, Russia would not want to allow that kind of transactional freedom to its citizens — but now we’re at the point that bitcoin is used so often in every day commerce that the opportunity cost for them not to allow it is simply too great,” he added.
Bitcoin prices have more than doubled in the past year amid optimism over the approval of the first U.S. spot bitcoin — and, more recently, ether — exchange-traded funds, as well as the so-called halving event which reduces the supply of newly issued tokens.
The world’s largest digital currency is currently worth $66,000, according to CoinGecko data, up over 120% in the last 12 months.
Under pressure from sanctions
Growing tensions between Russia and the U.S. and its allies have led to innumerable sanctions on individuals and entities in Russia in retaliation to its assault on Ukraine.
The U.S., European Union and Britain are among the jurisdictions that imposed sanctions on Russia after its February 2022 invasion of Ukraine. They’ve continued to amp up pressure on the country, targeting President Vladimir Putin, Russia’s financial sector, and countless oligarchs.
In addition to passing legislation allowing Russian firms the ability to transact internationally via crypto, the Russian central bank will also be given permission to move money overseas using private digital currencies.
Elvira Nabiullina, the Russian central bank governor, said Tuesday that crypto-based payments would begin taking place before the end of 2024.
“We are already discussing the terms of the experiment with ministries and departments, with businesses, and we expect that the first such payments will take place before the end of this year,” she said.
The central bank’s commitment to use crypto as a method of cross-border payment marks a reversal from the regulator’s previous stance on the technology.
In January 2022, the Russian central bank proposed banning the use of crypto for transactions, as well as the mining of digital currencies, citing threats to financial stability, citizens’ wellbeing…
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