- Russia passes bills to formalize international cryptocurrency payments by September.
- The bill also stipulated cryptocurrency mining regulations with energy limitations.
Russia is on track to adopt cryptocurrency for international payments by September.
The first international payments using crypto could be expected by the end of the year, reported Reuters, citing Russian Central Bank Governor Elvira Nabiullina.
The outlook was based on passing a key bill enabling the use of cryptos in cross-border trade. Reacting to the bill’s passage, the head of the Duma said,
“We are taking a historic decision in the financial sphere.”
Will the Russia crypto plan ease sanctions?
The report linked Russia’s crypto development to plans to reduce financial pressures from sanctions by the West.
Apparently, Russia has experienced payment delays, especially with key trading partners like China, India, and UAE.
According to the report, a large portion of international transfers from these trade partners passed through the international SWIFT system. Therefore, they were under pressure to follow Western sanctions against Russia.
Despite championing trade partners to use local currencies, including BRICS countries, caution and secondary sanctions from partners have made it difficult for Russia’s economy.
This has affected imports, as noted by Elvira Nabiullina.
“The risks of secondary sanctions have grown. They make payments for imports difficult, and that concerns a wide range of goods.”
According to the Reuters report, the delays have led to an 8% decline in Russian imports, a key risk for Russia’s economy.
As such, using cryptocurrencies for international payments could help mitigate the above challenges. The new bill that paved the way for this expected adoption also contained cryptocurrency mining regulations.
For firms eyeing to mine digital assets in Russia, they must meet regulatory requirements and the set energy limit, as reported by Tass, a Russian news agency.
“Individuals who do not exceed the energy consumption limits set by the Russian government will receive the right to mine digital currencies without being included in the register.”
Russian President Vladimir Putin previously echoed the strict energy limit used by cryptocurrency miners. The president had expressed concerns that cryptocurrency mining could lead to energy shortages.
The market awaits to see how the Russian law will play out from September and if more Russian trade partners will be okay with international cryptocurrency payments.
