In a significant legislative move, Russian lawmakers have passed a bill permitting businesses to use Bitcoin and other cryptocurrencies in international trade, according to a report by Reuters.
This
development is part of Russia's strategy to circumvent Western
sanctions imposed following the invasion of Ukraine. The new law,
expected to take effect in September, aims to address delays in
international payments, particularly with key trading partners like
China, India, and the UAE.
JUST IN: 🇷🇺 Russian law makers passes bill allowing businesses to use #Bitcoin and cryptocurrencies in international trade — Reuters pic.twitter.com/yFExWcIG9k
— Bitcoin Magazine (@BitcoinMagazine) July 30, 2024
Central bank Governor Elvira Nabiullina, a proponent of the law, announced that the first cryptocurrency transactions will occur before the year's end.
The central bank will establish an "experimental" infrastructure for these payments, with further details pending.
"The risks of secondary sanctions have grown," Nabiullina stated.
"They make payments for imports difficult, and that concerns a wide range of goods."
The legislation also includes regulations on cryptocurrency mining and the circulation of other digital assets but maintains the ban on cryptocurrency payments within Russia.
The central bank highlighted that payment delays have caused an 8% drop in Russian imports in the second quarter of 2024.
Despite efforts to shift to trading partners' currencies and develop an alternative BRICS payment system, many transactions still rely on dollars and euros via the SWIFT system, risking secondary sanctions.
Nabiullina emphasized that these sanctions have complicated import payments, extending supply chains and increasing costs.
This decision by Russian lawmakers aims to mitigate the economic challenges posed by sanctions and ensure smoother international trade operations.
Anatoly Aksakov, the head of the Duma lower house of parliament, reportedly told lawmakers, "We are taking a historic decision in the financial sphere" by passing this legislation.
