Russian Lawmakers Vote to Legalize Cryptocurrencies for International Settlements in Effort to Dodge Sanctions
Russian lawmakers have made a bold move to legalize cryptocurrencies for international settlements in an effort to navigate around the sanctions imposed by Western countries. The new law, set to take effect in September, is seen as a way to address the struggles faced by the country’s economy with international transfers since the outbreak of the war in Ukraine earlier this year.
According to Reuters, the first crypto transactions under the new law could take place before the year ends, providing a potential lifeline for Russian companies facing difficulties in completing transactions with trading partners due to Western sanctions.
Anatoly Aksakov, head of the Duma’s financial market committee, explained to Bloomberg that cryptocurrencies will now be subject to the same regulations as foreign currencies like the U.S. dollar in Russia. This move comes as Russia has taken an inconsistent stance on crypto for international settlements since the start of the war, initially imposing a ban on crypto payments but later allowing financial services firms to trial crypto for certain use cases.
Many heavily sanctioned countries, such as Venezuela, already utilize cryptocurrencies for their international settlements. However, Russian crypto analyst Ani Aslanyan predicts that participation in crypto transactions will likely be limited to large- and mid-size companies due to the stringent conditions of the new legislation.
The passage of the bill is expected to draw increased scrutiny from countries like the U.S. on Russian crypto activity. Russian lawmakers have been vocal about the need for innovative solutions to address the country’s payments issues, with the governor of the Russian central bank suggesting that alternative international payment systems may emerge in response to sanctions.
In addition to legalizing cryptocurrencies for international settlements, lawmakers are also set to vote on a new bill governing crypto mining. Russia, known for its cheap energy and favorable mining conditions, has historically been a major player in the global crypto-mining industry. However, concerns have been raised about the potential impact of unregulated mining on electricity supply, prompting President Putin to caution on the need for proper regulation.
As Russia continues to navigate the challenges posed by Western sanctions, the legalization of cryptocurrencies for international settlements represents a significant step towards finding alternative solutions to support the country’s economy.
