Russian parliament passes bill for crypto use in international trade, legalizes crypto mining

The Russian Parliament has passed a bill that allows the use of cryptocurrencies in international trade and legalizes crypto mining.

The legislation aims to facilitate international transactions that have been hindered by Western sanctions and regulatory pressures on local banks. The use of crypto would allow certain industries to bypass certain trade regulations.

Russia has seen significant disruptions in global transactions with key trading partners including China, India, the United Arab Emirates and Turkey, according to Reuters, as local banks exercise greater caution under pressure from Western regulators.

BREAKING NEWS: 🇷🇺 The Russian parliament has passed a bill allowing the use of electronic devices. #Bitcoin and the use of cryptocurrencies in international transactions.

— Whale Insider (@WhaleInsider) July 24, 2024

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

The new law aims to strengthen Russia’s trade relations and challenge global regulatory dynamics. Other countries have taken similar action. For example, Venezuela used crypto to bypass international sanctions, raising concerns among U.S. lawmakers.

Russia begins legalizing crypto mining

Today, the parliament passed a bill to legalize cryptocurrency mining in Russia. The bill, drafted by MP Anatoly Aksakov and others, requires government and Bank of Russia regulations for mining activities, with compliance overseen by a federal body. The initiative aims to legalize mining, provide income declaration and facilitate tax payments.

The bill also aims to reduce legal risks by allowing the sale of digital currencies mined without using Russian information infrastructure and exempting these transactions from currency regulation laws. It includes a ban on cryptocurrency advertising and, if approved, would come into force on September 1, 2024.

Crypto and its impact on US relations

The approval of this bill positions Russia against long-standing U.S. efforts to restrict Moscow’s international trade capabilities. U.S. officials, including Treasury Secretary Janet Yellen, have been closely monitoring Russia’s use of cryptocurrencies to evade sanctions.

“We pay close attention to this [Russian] “The use of cryptocurrencies and stablecoins. We don’t think what Russia did was a big deal, but as our sanctions get more and more painful, it becomes a concern,” Yellen said recently.

As sanctions tighten, Russia’s use of cryptocurrencies could worry U.S. lawmakers as they seek to tighten oversight of the country’s international trade.

President Vladimir Putin has criticized bitcoin mining’s high energy consumption while supporting the use of crypto to mitigate the impact of international sanctions. The legal development underscores Russia’s determination to explore alternative financial mechanisms to sustain its international trade amid ongoing economic pressure from the West.