Here’s some big news from Russia that could shake up the global market! Russian lawmakers have just passed a groundbreaking law allowing businesses to use Bitcoin and other cryptocurrencies for international trade. This move is part of Russia’s strategy to sidestep Western sanctions imposed after the invasion of Ukraine.
What’s the Scoop?
Starting in September, Russian businesses can use cryptocurrencies to settle international trades, especially with major partners like China, India, and the UAE. This is huge because it aims to solve the delays in payments that have been a real headache for traders.
Elvira Nabiullina, the Governor of Russia’s central bank, is all for this new law. She announced that we can expect the first crypto transactions before the end of the year. The central bank is setting up an “experimental” infrastructure to facilitate these payments, although the finer details are still under wraps.
Nabiullina highlighted that secondary sanctions have made it tough to pay for imports, impacting a wide range of goods. The legislation also tackles cryptocurrency mining and the circulation of other digital assets but keeps the ban on using crypto for payments within Russia intact. The central bank noted an 8% drop in Russian imports in the second quarter of 2024 due to payment delays.
Despite efforts to switch to trading partners’ currencies and develop an alternative BRICS payment system, many transactions still rely on dollars and euros through the SWIFT system. This reliance brings the risk of secondary sanctions, complicating import payments, lengthening supply chains, and increasing costs.
Why It Matters
This move is a game-changer. It’s Russia’s way of fighting back against economic challenges posed by sanctions and ensuring smoother international trade. Anatoly Aksakov, head of the Duma lower house of parliament, called it a “historic decision in the financial sphere.” For crypto traders, this means watching how these legislative changes might open new trading opportunities and reshape the global crypto landscape.
