Russian Crypto Payments Now Approved Amid Challenges of Sanctions

Key Points:

• Russia’s Parliament has approved a bill to legalize international Bitcoin payments.
• Russian crypto payment laws would allow the central bank to review the use of cryptocurrency in cross-border transactions.
• New regulations also tighten the rules on domestic crypto mining.

What has been termed probably the most far-reaching legislative change, Russia’s Parliament approved a bill in its first reading to legalize international transactions using Bitcoin.

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Russian Crypto Payment Bill Passed Amid Western Sanctions

The unanimous voting took the proposal to 404 votes in its favour and is set for the final vote on 30th July, a date when the bill can finally come into force by September 1, 2024.

The Russian crypto payments are aimed at reducing Russia‘s reliance on the SWIFT network, to which Moscow has had no access for the past two years because of Western sanctions. This new law is prone to ease cross-border transactions and will help Russia overcome financial restrictions implemented against it by the West.

Anatoly Aksakov, the chairman of the State Duma’s committee on the financial market, hinted that more Russian crypto payment laws are currently under consideration. He is sure that these proposals will be passed by the Federation Council and further by President Vladimir Putin. Aksakov outlined that though somebody voiced fears of possible turmoil in the market, the legalization of cryptocurrency is just an unstoppable process.

First, there was a sweeping crypto payment ban in Russia at the beginning of the conflict in Ukraine; then, it was undone to allow for limited trials by financial services firms. Parallel to efforts to switch to trading partners’ currencies and the building up of alternative, BRICS-centric payment systems, many transactions still happen in dollars and euros through SWIFT.

Stricter Regulations over Crypto Mining Come with Legalization Efforts

One Russian crypto analyst, Ani Aslanyan, estimated that new regulations would benefit only big and mid-sized companies due to the complexity.

The new laws will also grant Russia’s central bank the prerogative to test the use of cryptocurrencies in international settlements and tighten its regulation over domestic crypto mining, which has caused energy deficits in Siberian regions.