Russia Legalizes Crypto Payments for International Trade to Bypass Western Sanctions

MOSCOW: Russian lawmakers passed a bill on Tuesday that will allow businesses to use crypto currencies in international trade, as part of efforts to skirt Western sanctions imposed after Russia's invasion of Ukraine.

Russia will permit businesses to use cryptocurrencies in international trade as part of efforts to circumvent Western sanctions, according to a bill passed by lawmakers on Tuesday.

The legislation, which is expected to come into effect in September, will allow Russia to make its first cryptocurrency transactions before the end of the year, according to Elvira Nabiullina, governor of the Russian central bank and a backer of the new law.

Russia has faced major delays in international payments with key trading partners like China, India and the United Arab Emirates after banks in those countries became more cautious amid pressure from Western regulators.

“We are making a historic decision in the financial sphere,” Anatoly Aksakov, head of the Duma lower house of parliament, told lawmakers.

The central bank will establish a new “experimental” infrastructure for cryptocurrency payments under the legislation. The specifics of the infrastructure have not yet been made public.

The legislation is part of a broader package that also covers cryptocurrency mining and the circulation of other digital assets. It does not, however, overturn the current prohibition on cryptocurrency transactions within Russia.

According to the central bank, delays in payments have become a major problem for the Russian economy, contributing to an 8% decrease in imports during the second quarter of 2024.

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