Russian parliament passed a bill allowing the use of crypto for international trade and also legalized crypto mining.
The legislation aims to facilitate international transactions that Western sanctions and regulatory pressures on local banks have hampered. The use of crypto will allow certain industries to bypass specific trade regulations.ย
According to Reuters, Russia has experiencedย notable interruptionsย in global transactions with key trading partners like China, India, the United Arab Emirates, and Turkey. This is due to local banks exercising increased caution under pressure from Western regulators.
While crypto is not permitted for domestic payments in Russia, this new bill represents a significant shift in the countryโs approach to digital currencies internationally.ย
The new law aims to strengthen Russiaโs trade relationships and challenge global regulatory dynamics. Other countries have already taken similar actions. For example, Venezuela has used crypto to bypass international sanctions, causing worry among U.S. lawmakers.
Russia starts legalizing crypto mining
Today, the parliamentย passedย a billย to legalize cryptocurrency mining in Russia. Drafted by Deputy Anatoly Aksakov and others, the bill mandates government and Bank of Russia regulations for mining activities, with compliance monitored by a federal body. The initiative aims to legalize mining, ensure income declaration, and facilitate tax payments.
The bill also seeks to reduce legal risks by allowing the sale of mined digital currencies without using Russian information infrastructure and exempting these transactions from currency regulation laws. It includes a ban on cryptocurrency advertising and, if approved, will take effect on September 1, 2024.
Impact on crypto and U.S. relations
The approval of this bill places Russia in opposition to the United Statesโ longstanding efforts to curtail Moscowโs international trade capabilities. U.S. officials, including Treasury Secretary Janet Yellen, have closely monitored Russiaโs use of crypto to evade sanctions.ย
โWe are very attentive to the [Russian] use of cryptocurrencies and stablecoins. We donโt think itโs a very substantial thing that Russia is doing but as our sanctions bite more and more, it becomes a concern,โ Yellen said recently.
As sanctions tighten, Russiaโs use of crypto could concern U.S. legislators trying to tighten their grip on the countryโs international trade.ย
President Vladimir Putin, while critical of bitcoin miningโs high energy consumption, supports using crypto to mitigate the impact of international sanctions. This legislative development underscores Russiaโs determination to explore alternative financial mechanisms to sustain its international trade amidst ongoing economic pressures from the West.
