Russia is actively using Bitcoin and other cryptocurrencies to counteract the impact of Western sanctions on its economy, Reuters reported on Dec. 25.
According to the report, Finance Minister Anton Siluanov recently said that Russian businesses have been using digital currencies, especially Bitcoin, mined inside Russia, for international trade. According to reports, he said:
“As part of the experimental regime, it is possible to use bitcoins, which we had mined here in Russia (in foreign trade transactions). Such transactions are already occurring.”
Besides Bitcoin, blockchain analysis firm Chainlysis suggested that stablecoins like USDT and USDC play a role in Russia’s international trade. The digital assets are highly liquid, but the centralized management could limit their adoption.
What made Russia turn to crypto?
This strategic move comes after Western nations imposed sanctions following Russia’s actions in Ukraine. This has significantly limited the ability for Russian firms to trade internationally through the conventional banking system.
Cryptocurrencies have become a solution of choice for Russia.
In July of this year, the Russian parliament passed a new law allowing digital currencies to be used in international trade. In November, Vladimir Putin formalized the legislation that classified cryptocurrencies as foreign-trade property. In November, President Vladimir Putin formalized legislation that classified cryptocurrencies as property for foreign trade purposes.
Putin also publicly supported digital currency, calling them unstoppable instruments to improve economic efficiency and stabilty.
Siluanov expressed the same sentiment and was confident that adoption of crypto in international trade would grow over the next year. These measures, he said, will expand and give Russian businesses greater flexibility to navigate global markets.
“He added”
“We believe they should be expanded and developed further. I am confident this will happen next year.”
Despite these advancements, Russia’s crypto adoption has limitations. To give you some context, Russia plans to implement a six-year ban on mining in 10 regions beginning in January 2025 in order to combat energy concerns.
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