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Russia is taking official steps toward accepting cryptocurrency as a solution for potential international payment challenges.<\/p>\n
The central bank has also called for the crypto payment infrastructure to be developed more quickly, even as the country\u2019s anti-money laundering watchdog warns of possible risks. The Russian parliament is scheduled to vote<\/a> on new digital asset legislation on July 23.<\/p>\n Why the push for crypto?<\/strong><\/p>\n Since facing Western sanctions, Russia has encountered significant delays in international transactions with key trading partners, including China, India, the UAE, and Turkey. Local banks, wary of Western regulators, have become increasingly cautious. The proposed legislation aims to allow cryptocurrency use in international payments to keep trade flowing.<\/p>\n Yuri Chekhanchin, head of the money laundering watchdog, explained, \u201cThis is a necessity for businesses, especially when dealing with sanctions. Traditional methods don\u2019t always work for accessing international markets.\u201d<\/p>\n Russia isn\u2019t alone in exploring crypto to sidestep sanctions. Venezuela, for instance, already uses cryptocurrency transactions for this purpose. This trend has raised concerns among US lawmakers, who have brought the issue to the Biden administration\u2019s attention.<\/p>\n Chekhanchin pointed out that the main risk stems from loose cryptocurrency regulations in some countries. He argues that his agency should have the power to block transactions that violate Russian law, though he didn\u2019t specify which countries he was referring to.<\/p>\n It is important to note that cryptocurrencies are not currently allowed for domestic payments in Russia, a stance that the new law is not expected to change. The central bank has acknowledged that payment issues are a key challenge for the Russian economy.<\/p>\n Putin\u2019s stance and digital rouble<\/strong><\/p>\n Russian president Vladimir Putin commented on digital money at a government meeting, praising the pilot project of rolling out the digital ruble, a blockchain-like asset underwritten by the central bank.<\/p>\n Russia and Iran\u2019s central banks are building a bilateral digital currency to facilitate transactions despite sanctions, with similar discussions ongoing with China and Belarus.<\/p>\n Putin also raised concerns about the significant energy consumption of cryptocurrency mining farms in Siberia, which benefit from low electricity costs. He proposed that tax rules and electricity tariffs for mining farms be addressed in a new law.<\/p>\n International implications<\/strong><\/p>\n The use of cryptocurrency by Russia to settle international trade has far-reaching consequences for the world economy and global politics. It epitomises how other countries seek new payment networks to circumvent international sanctions and continue trade.<\/p>\n As the world waits to see if Russia will adopt all or some crypto restrictions, the effectiveness of traditional financial sanctions in a growing digital age is already under increased scrutiny. The results of Russia\u2019s experiment with cryptocurrencies in their trade balance and liquidity operations could set a precedent for how other nations handle digital assets long-term.<\/p>\n (Image by \u0414\u043c\u0438\u0442\u0440\u0438\u0439 \u041e\u0441\u0438\u043f\u0435\u043d\u043a\u043e<\/a>)<\/em><\/p>\n See also: North Korean hackers transfer stolen crypto to wallet of Asian payment firm<\/a><\/strong><\/p>\n Want to learn more about blockchain from industry leaders?\u00a0Check out\u00a0Blockchain Expo<\/a>\u00a0taking place in Amsterdam, California and London.<\/strong><\/p>\n Explore other upcoming enterprise technology events and webinars powered by TechForge\u00a0<\/strong>here<\/strong><\/a>.<\/strong><\/p>\n