by Frank Bergman, Slay News:
The Russian government has just taken a significant step in bypassing global sanctions by passing new laws to allow businesses to use Bitcoin for international trade payments.
Russian lawmakers passed a bill on Tuesday that will allow businesses to use cryptocurrencies in international trade.
The move is part of Russia’s efforts to skirt Western sanctions imposed after the nation’s invasion of Ukraine.
The law is expected to go into force in September.
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Russian Central Bank Governor Elvira Nabiullina, one of the backers of the new law, said the first transactions in cryptocurrencies will take place before the end of the year.
Russia has faced significant delays in international payments with major trading partners such as China, India, and the United Arab Emirates.
Banks in those countries, under pressure from Western regulators, became more cautious about dealing with Russia.
“We are taking a historic decision in the financial sphere,” the head of Russia’s Duma lower house of parliament, Anatoly Aksakov, told lawmakers.
Under the new law, the central bank will create a new “experimental” infrastructure for cryptocurrency payments.
Details of the infrastructure have yet to be announced.
The law is part of a package that also includes regulations on the mining of cryptocurrencies and the circulation of other digital assets.
The new law will not lift an existing ban on cryptocurrency payments inside Russia, however.
The central bank said that delays in payments have become a major challenge for the Russian economy.
The delays have led to an 8% decline in Russian imports in the second quarter of 2024.
Despite Russia’s efforts to switch to the currencies of its trade partners and develop an alternative payment system within the BRICS group of emerging economies, many payments are still conducted in dollars and euros.
These payments still go through the international SWIFT system, which has blocked Russia.
This exposes banks in countries trading with Russia to the risk of secondary sanctions, forcing them to tighten their compliance procedures.
