Russian officials announced that the country will legalize the use of cryptocurrency for international trade in January 2023 in a move to circumvent the Western sanctions.
The congressional finance committee chairman, Anatoly Aksakov, said that although bitcoin (BTC) and cryptocurrency will be permitted for international trade, their use as a means of payment within the country will be prohibited. Those found using digital assets could face liability.
Russia has been considering the use of cryptocurrency for international trade for almost a year, following a package of Western sanctions implemented after its invasion of Ukraine.
Crypto regulation in Russia
The move to legalize cryptocurrency for international trade follows Russia’s regulatory roadmap for bitcoin, which was laid out in January 2022. The country’s Ministry of Finance later submitted a proposal on the matter. In April, the tax authority proposed allowing entities to accept cryptocurrency as payment in foreign trade.
The Bank of Russia, which had previously called for a complete ban on bitcoin and other cryptocurrencies, eventually voiced support for allowing BTC payments for international settlement in June. In September, the central bank agreed with the Ministry of Finance that it would be “impossible to do without cross-border settlements in cryptocurrency.”
Aksakov also stated that Russia is looking to create a central bank digital currency (CBDC) that can be used in international trade. The country has been working on a digital ruble for several years, with the central bank testing it in certain regions. Aksakov said that the digital ruble could be launched within the next five years and used for international trade, particularly with countries in the Middle East and Asia.
The move to legalize cryptocurrency for international trade is part of Russia’s efforts to diversify its economy and reduce its reliance on traditional financial systems. By using cryptocurrency for international trade, Russia is potentially seeking to bypass financial sanctions and avoid using traditional payment methods, such as the U.S. dollar or euro.
The news follows recent reports that Lawmakers in Russia have proposed a law adjustment to control a crypto exchange while outlawing the use of cryptos in the nation. Recently, some industry insiders also suggested that Russia may soon become a major player in the space of cryptocurrency mining and secure its place as the world’s second-largest crypto miner.