Regulation
Russia Moves to Regulate Cryptocurrencies as US Sanctions Pressure Mounts
Putin discusses cryptocurrency legislation. Source: Kremlin
Key points
- Russia’s cryptocurrency regulation bill is set to be passed quickly, aiming to come into force by September 1.
- The law marks a significant shift from previous resistance to the use of cryptocurrencies in Russia.
Share this article
Russia is moving quickly to regulate cryptocurrencies as its companies face increasing difficulties with international payments due to US sanctions over the conflict in Ukraine. According to an initial relationship The State Duma is set to consider a cryptocurrency bill that would treat digital assets similarly to foreign currency, Bloomberg reports.
The lower house of parliament will debate the cryptocurrency legislation in its second and third readings on Tuesday, along with a separate bill regulating cryptocurrency mining. Lawmakers expect swift approval from the upper house before President Vladimir Putin signs the measures into law, potentially taking effect by September 1.
Anatoly Aksakov, head of the Duma’s financial market committee, said that Russia had previously concerns about cryptocurrency legalization but now considers their use as “an objective phenomenon” that requires regulation.
Crypto Briefing reported in early April this year how Aksakov She said That “[the] the need for a ban is due to the fact that today [crypto] – is a quasi-currency that replaces the ruble in the country. But only the Russian ruble fulfills the mission of the monetary unit,” with the bill meeting with both opposition and support.
Growing pressure from US sanctions
The shift comes at a time when Russian companies are facing increasing payment pressures due to threats of U.S. secondary sanctions on foreign banks.
In June, the United States restrictions imposed to stifle support for the Kremlin’s war on Ukraine, exposing local banks in countries that trade with Russia to a greater risk of “secondary sanctions,” which delay and stop payments from their trading partners such as China and Turkey.
Although the use of cryptocurrencies for payments is currently banned in Russia, Putin recently urged officials to regulate digital assets domestically and for foreign transactions.
Putin said that cryptocurrencies are “increasingly used in the world as a means of payment in international settlements.” official statement.
Russia’s central bank has since softened its stance on cryptocurrencies, supporting their experimental use in cross-border transactions, despite earlier calls for a complete ban.
Cryptocurrency as a foreign currency
Under the proposed legislation, cryptocurrencies would be regulated similarly to foreign currency in Russia. However, analysts predict that the restrictions could limit cryptocurrency payment capabilities to large exporters, potentially excluding small and medium-sized businesses. The Bank of Russia would serve as the primary regulator for all matters related to cryptocurrencies and digital assets.
This rapid regulatory push highlights Russia’s efforts to overcome economic sanctions and maintain international payment channels. However, the United States is likely to closely monitor the services and companies used by Russia in an attempt to circumvent the restrictions. These legislative developments reveal the growing role of cryptocurrencies in geopolitical and economic maneuvers between nations.
Share this article