Russia’s recent legislative move allowing businesses to use Bitcoin and other cryptocurrencies in international trade is a significant development in response to Western sanctions imposed post the Ukraine invasion. The new law is expected to take effect in September and aims to address delays in international payments, particularly with key trading partners like China, India, and the UAE. Central bank Governor Elvira Nabiullina, a supporter of the law, announced that the first cryptocurrency transactions will occur before the end of the year. An “experimental” infrastructure for these payments will be established by the central bank, with further details pending.
The risks of secondary sanctions have grown, as highlighted by Nabiullina, making payments for imports challenging and impacting a wide range of goods. The legislation also includes regulations on cryptocurrency mining and the circulation of other digital assets but maintains the ban on cryptocurrency payments within Russia. The central bank noted that payment delays have resulted in an 8% drop in Russian imports in the second quarter of 2024. Despite efforts to shift to trading partners’ currencies and develop an alternative BRICS payment system, many transactions still rely on dollars and euros via the SWIFT system, posing risks of secondary sanctions.
Russian lawmakers’ decision to allow businesses to use Bitcoin and other cryptocurrencies in international trade aims to mitigate economic challenges posed by sanctions and ensure smoother international trade operations. Anatoly Aksakov, the head of the Duma lower house of parliament, reportedly described the passing of this legislation as a “historic decision in the financial sphere.” Nabiullina emphasized that secondary sanctions have complicated import payments, extending supply chains, and increasing costs. The new law is part of Russia’s strategy to navigate around Western sanctions and continue trade with key partners.
In a move to address delays in international payments, particularly with key trading partners like China, India, and the UAE, Russian lawmakers have passed a bill permitting businesses to use Bitcoin and other cryptocurrencies in international trade. This decision comes as a response to Western sanctions following the invasion of Ukraine. Central bank Governor Elvira Nabiullina, a supporter of the law, announced that the first cryptocurrency transactions are expected to occur before the end of the year, with an “experimental” infrastructure for these payments to be established by the central bank.
The legislation also includes regulations on cryptocurrency mining and the circulation of other digital assets but maintains the ban on cryptocurrency payments within Russia. Nabiullina highlighted the risks of secondary sanctions, which have grown, making payments for imports difficult and impacting a wide range of goods. Payment delays have led to an 8% drop in Russian imports in the second quarter of 2024. Despite efforts to shift to trading partners’ currencies and develop an alternative BRICS payment system, many transactions still rely on dollars and euros via the SWIFT system, leaving them vulnerable to secondary sanctions.
Russian lawmakers’ decision to allow businesses to use Bitcoin and other cryptocurrencies in international trade is aimed at mitigating the economic challenges posed by sanctions and ensuring smoother international trade operations. Anatoly Aksakov, the head of the Duma lower house of parliament, described the passing of this legislation as a “historic decision in the financial sphere.” Nabiullina emphasized that secondary sanctions have complicated import payments, extending supply chains, and increasing costs. The new law marks a significant step in Russia’s strategy to circumvent Western sanctions and continue trade with key partners, addressing delays in international payments.
