Key Points
- Russia is set to adopt cryptocurrency for international payments by September.
- The new bill also contains regulations for cryptocurrency mining, including energy limitations.
Russia is moving towards formalizing the use of cryptocurrency for international payments by September. The first international transactions using digital currencies could be expected by the end of the year, according to a report by Reuters, citing Elvira Nabiullina, the Governor of the Russian Central Bank.
The development is based on the passage of a key bill that enables the use of cryptocurrencies in cross-border trade. The head of the Duma reacted to the bill’s passage by stating, “We are taking a historic decision in the financial sphere.”
Implications of the Crypto Plan
The report suggests that Russia’s progress in the crypto field is linked to its plans to alleviate financial pressures arising from Western sanctions. Payment delays have been experienced, particularly with key trading partners such as China, India, and the UAE.
A large portion of international transfers from these partners passed through the SWIFT system, placing them under pressure to comply with Western sanctions against Russia. Despite Russia’s efforts to encourage trade partners to use local currencies, secondary sanctions have posed challenges to the Russian economy.
Cryptocurrency Mining Regulations
The new bill also stipulates regulations for cryptocurrency mining. Companies interested in mining digital assets in Russia must adhere to regulatory requirements and the set energy limit. Russian President Vladimir Putin has previously expressed concerns that cryptocurrency mining could lead to energy shortages.
The market is now waiting to see how the Russian law will be implemented from September and whether more Russian trade partners will accept international cryptocurrency payments.
