Russia Legalizes Use of Bitcoin and Crypto Transactions for Cross-Border Trade Amid Sanctions

Russian legislators have taken a critical measure, endorsing a bill that permits entities to partake in international transactions using Bitcoin and other cryptographic forms of money, as reported by Reuters. This action is a tactical maneuver by Russia to sidestep sanctions from the West due to the ongoing conflict with Ukraine. Set to take effect come September, this legislation seeks to remedy hindrances in global payments, especially with major trade allies such as China, India, and the UAE.

Elvira Nabiullina, the Governor of Russia’s central bank and a supporter of this bill, conveyed that cryptocurrency exchanges are anticipated to commence by the end of this current year. An innovative infrastructure for these exchanges is to be set up by the central bank, with finer details yet to be disclosed.

“The jeopardy of incurring secondary sanctions has escalated,” stated Nabiullina. “Such sanctions are complicating the process for import payments, affecting a broad spectrum of commodities.”

While the new legislation governs cryptocurrency mining and the flow of digital assets, it continues to uphold the prohibition on domestic cryptocurrency transactions within Russia. The Central Bank accentuated that payment obstructions have been instrumental in the 8% diminution of Russian imports during the second quarter of 2024.

Even with endeavors to transition towards the currencies of trading partners and to forge a BRICS alternative payment system, a significant portion of transactions continues to depend on the US dollar and euro, processed through the SWIFT network—posing the risk of additional sanctions. Nabiullina noted the complexity these sanctions have added to import payments, which in turn, elongates supply chains and inflates expenditures.

The enactment of this law by Russian policymakers is designed to alleviate the economic strain brought about by sanctions and to ensure prospects for smoother operations in international commerce. “We are embarking on a historic juncture within the financial domain,” Anatoly Aksakov, chairman of the Duma’s lower house, reportedly addressed the parliament when discussing the adoption of this legislative framework.

News.Az