Russian lawmakers have just approved a groundbreaking law that allows businesses to use Bitcoin and other cryptocurrencies for international trade, aiming to sidestep Western sanctions imposed after the Ukraine invasion. Set to take effect in September, this move is designed to solve payment delays with major trade partners like China, India, and the UAE. The central bank will test out this new system before the end of the year, although crypto payments within Russia remain banned. This shift could reshape global trade dynamics and help Russia navigate its economic challenges.
In a pivotal legislative development, Russian legislators have approved a bill allowing businesses to engage in international transactions using Bitcoin and other cryptocurrencies, as reported by Reuters. This move is part of Russia’s strategy to bypass Western sanctions imposed after its military operation in Ukraine. The law, which is anticipated to come into effect in September, aims to resolve delays in international payments, particularly with major trade partners such as China, India, and the UAE.
Central Bank Governor Elvira Nabiullina, a supporter of the new law, revealed that the initial cryptocurrency transactions are slated to begin before the end of the year. The central bank plans to create an “experimental” payment infrastructure, with additional specifics to be announced reports Reuters.
“The risks of secondary sanctions have grown,” Nabiullina stated. “They make payments for imports difficult, and that concerns a wide range of goods.”
The law preserves the prohibition on using cryptocurrencies for domestic payments in Russia, but it also contains rules on cryptocurrency mining and the transfer of other digital assets. The central bank emphasized that in the second quarter of 2024, Russian imports fell by 8% as a result of payment delays.
The SWIFT system is still used for numerous transactions, even in spite of efforts to switch to trading partners’ currencies and create an alternative BRICS payment system. This puts transactions at danger of secondary penalties. Nabiullina underlined how the restrictions have increased costs, lengthened supply chains, and complicated import payments.
The goal of this move by Russian MPs is to facilitate more seamless foreign trade while lessening the negative effects of sanctions on the country’s economy. The leader of the lower house of parliament, the Duma, Anatoly Aksakov, allegedly said to legislators, “We are taking a historic decision in the financial sphere” by passing this legislation.
