Russia Legalizes The Use Of Crypto For International Trade

Russia legalizes the use of crypto for international trade (Photo; Doc. Sygna)

JAKARTA - Russia's bill-making board passed on Tuesday, July 30, allowing businesses to use crypto assets in international trade. The move was taken as an attempt to circumvent Western sanctions imposed following Russia's invasion of Ukraine.

Reporting from Crypto News, Duma Negara, Russia's lower house of parliament, gave initial approval of the law. The law allows businesses to use crypto assets for cross-border trade and is expected to take effect in September.

The Governor of the Central Bank of Russia, Elvira Nabiullina, supports this law and states that the first crypto asset transaction will take place before the end of this year.

"This is a historic decision in the financial sector," Anatoly Aksakov, Duma's chief, told legislators.

The bill requires the central bank to create an experimental' infrastructure for crypto asset payments, although specific details of this infrastructure have not been announced. The bill is part of a broader package that includes regulation of crypto asset mining and circulation of other digital assets. However, this law will not lift the ban on payments using crypto assets currently in effect in Russia.

The slowdown in international payments has had a significant impact on Russia's economy, causing an 8% drop in imports in the second quarter of 2024. Although Russia has attempted to switch to its trading partner currency and develop an alternative payment system in the developing economy group BRICS, many transactions are still being made in dollars and euros through the international SWIFT system.

The risk of secondary sanctions has increased, forcing banks in countries trading with Russia to tighten their compliance procedures. The risk of secondary sanctions has increased. They make payments for imports difficult, and it affects different types of goods, "said Nabiullina.

Mati Greenspan, CEO of Quantum Economics, commented that Russia's move to accept crypto was logical because bitcoin transactions "cannot be censored or blocked by any government or bank." He added that previously, Russia did not want to give its citizens the freedom of such transactions, but now the use of Bitcoin in everyday trading has become so common that it does not allow Russia to ignore it.