Russian Parliament Passes Law on Use of Cryptocurrencies in International Trade, Legalizes Cryptocurrency Mining

The Russian parliament has passed a bill allowing the use of cryptocurrencies in international trade and has also legalized cryptocurrency mining.

The legislation aims to facilitate international transactions that Western sanctions and regulatory pressure on local banks have hindered. The use of cryptocurrencies will allow certain industries to circumvent specific trade regulations.

According to Reuters, Russia has experimented notable disruptions in global transactions with key trading partners such as China, India, the United Arab Emirates and Turkey. This is due to local banks exercising greater caution under pressure from Western regulators.

Although cryptocurrencies are not allowed for domestic payments in Russia, this new bill represents a significant shift in the country’s approach to digital currencies internationally.

The new law aims to strengthen Russia’s trade relations and challenge global regulatory dynamics. Other countries have already adopted similar measures. For example, Venezuela has used cryptocurrencies to circumvent international sanctions, raising concerns among U.S. lawmakers.

Russia Begins Legalizing Cryptocurrency Mining

Today the parliament past a bill to legalize cryptocurrency mining in Russia. Drafted by MP Anatoly Aksakov and others, the bill imposes regulations on mining activities by the government and the Bank of Russia, with compliance monitored by a federal body. The initiative aims to legalize mining, ensure tax reporting, and make it easier to pay taxes.

The bill also seeks to reduce legal risks by allowing the sale of mined digital currencies without using Russia’s information infrastructure and exempting these transactions from currency regulation laws. It includes a ban on cryptocurrency advertising and, if passed, will take effect on September 1, 2024.

Impact on Cryptocurrency Relations with the United States

The passage of this law puts Russia in opposition to long-standing U.S. attempts to limit Moscow’s international trade capabilities. U.S. officials, including the Treasury Secretary My Janet Yellenhave been closely monitoring Russia’s use of cryptocurrencies to evade sanctions.

“We are very careful about the [Russian] use of cryptocurrencies and stablecoins. We don’t think it’s a very substantial thing that Russia is doing, but as our sanctions bite more and more, it becomes a concern,” Yellen She said recently.

As sanctions tighten, Russia’s use of cryptocurrencies could worry U.S. lawmakers seeking to tighten their grip on the country’s international trade.

President Vladimir Putin, while criticizing bitcoin mining, high energy consumptionsupports the use of cryptocurrencies to mitigate the impact of international sanctions. This legislative development underscores Russia’s determination to explore alternative financial mechanisms to support its international trade amid ongoing economic pressure from the West.

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