Russia fights against sanctions! Central bank to allow businesses to use cryptocurrency for global payments by the end of 2024

To address the financial pressure brought by Western sanctions, Russia has approved a new law allowing the use of cryptocurrency for international payments. This legislative change is expected to reshape the landscape of Russian businesses' cross-border trade, as the use of cryptocurrency for payments was previously explicitly prohibited domestically in Russia.

Russian Lawmakers Approve Use of Cryptocurrencies for Cross-Border Trade

On Tuesday, the Russian parliament, the State Duma, preliminarily approved a new law allowing businesses to use cryptocurrencies for international transactions. This decision comes as Russia faces increasing financial restrictions from the West. The speaker stated, "We have made a historic decision in the financial sector."

Sanctioned Countries Showing Favorable Attitude towards Cryptocurrencies

Mati Greenspan, CEO of the crypto market research firm Quantum Economics, emphasizes the practical advantages of Russia turning to cryptocurrencies.

He pointed out that Bitcoin transactions are not subject to any government or banking scrutiny or interference. Mati Greenspan added, "Given the widespread use of Bitcoin in everyday commerce, Russia now urgently needs this transactional freedom."

U.S. Treasury: Russia Evading Sanctions with USDT, Congress Urgently Needs to Expand Regulatory Authority

Russia Resisting Western Sanctions Pressure

The U.S., EU, and UK imposed extensive sanctions on Russia following its invasion of Ukraine in February 2022. These sanctions target Russian President Putin, the Russian financial sector, and numerous oligarchs. The tightening sanctions have driven Russia to seek alternative financial systems.

Bank of Russia to Introduce Cryptocurrency Trading Starting Late 2024!

In response, the Bank of Russia is now allowed to use private digital currencies for international transactions. The central bank governor announced that payments based on cryptocurrencies will commence by the end of 2024. This marks a significant shift for the central bank from its previous stance of attempting to ban cryptocurrency transactions, which was driven by concerns over financial stability and monetary policy sovereignty.

Implementation of 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 the large-scale implementation of the digital ruble by July 2025. Unlike decentralized cryptocurrencies like Bitcoin, central bank digital currencies (CBDCs) are government-issued and digitally replicate fiat currency.

Can Cryptocurrencies Help Countries Evade Sanctions?

Quantum Economics states that Russia's adoption of cryptocurrencies makes sense from a global trade perspective, as it may assist in cross-border payments with countries and businesses restricted by U.S. sanctions.

Other sanctioned countries, such as North Korea and Iran, are also turning to cryptocurrencies to bypass financial barriers. For example, North Korea has been accused of using cryptocurrencies to raise funds for national projects and evade sanctions.