Russia’s lower parliament has approved a new law allowing the use of cryptocurrencies for international payments. The law is set to take effect on September 1, 2024.
This decision, made on July 30, 2024, aims to help Russian businesses navigate the financial pressures imposed by Western sanctions following the invasion of Ukraine. Central Bank Governor Elvira Nabiullina announced that the first cryptocurrency transactions would occur before the end of the year. The new legislation will enable businesses to conduct cross-border trade using digital currencies. This is expected to address significant delays in international payments with key trading partners like China, India, and the UAE.
Nabiullina noted that these delays have contributed to an 8 per cent decline in Russian imports in the second quarter of 2024.
She stated,
The risks of secondary sanctions have grown. They make payments for imports difficult, and that concerns a wide range of goods.
Under the new law, the central bank will establish an “experimental” infrastructure for cryptocurrency payments. While the law facilitates foreign trade settlements in crypto, it does not lift the existing ban on cryptocurrency payments within Russia.
Experts believe that cryptocurrencies could offer a viable solution for Russia’s foreign trade, especially with countries that have not imposed sanctions. The BRICS group of emerging economies—Brazil, Russia, India, China, and South Africa—may serve as a promising platform for mutual cryptocurrency payments.
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