Russian Companies Start Using Bitcoin and Other Digital Currencies in International Transactions

Russian companies started conducting international transactions using bitcoin and other digital currencies, following legislative changes allowing such payments.

Russia has begun permitting companies to conduct international transactions using bitcoin and other digital currencies, following legislative changes that legalized the practice. This move is part of Russia's efforts to mitigate the impact of Western sanctions, which have hindered the country's trade with key partners such as China and Turkey due to local banks' reluctance to handle Russia-related transactions.

To facilitate international trade, Russia legalized the use of cryptocurrencies in foreign trade this year and took steps to formalize crypto mining, including bitcoin mining. Being a global leader in bitcoin mining, Russia is now permitted to use the mined bitcoins in foreign trade transactions, as stated by Finance Minister Anton Siluanov in an interview with the Russia 24 television channel.

Highlighting the already commenced transactions of this nature, Siluanov emphasized the importance of expanding and developing this method. "I am confident this will happen next year," he added, while also expressing his belief that digital currencies are the future of international payments.

The law permits these payments but maintains a ban on using cryptocurrencies as regular legal tender within Russia. However, it does not clearly outline rules for these transactions, giving Russia’s central bank authority to oversee an “experimental” regulatory framework.

According to Central bank Governor Elvira Nabiullina, Russia’s business partners in various countries are facing "tremendous pressure," leading her to anticipate the eventual emergence of a new global payments system independent of Western institutions.

Earlier this month, President Vladimir Putin criticized the U.S. administration for using the U.S. dollar's role as the global reserve currency as a political tool, which he argued has prompted many countries to seek alternative assets. Among these alternatives, Putin specifically mentioned bitcoin, emphasizing that it cannot be regulated by any global authority. His remarks indicate strong support for the broader adoption of cryptocurrencies in Russia.

The details of the law, particularly regarding the practical execution of crypto payments, remain unclear. While the legislation grants the central bank authority over the experimental regime, it does not specify the rules for cross-border transactions.

According to Bloomberg, Russia plans to use its National Payment Card System for converting rubles into cryptocurrencies during the trial. If the trial is successful, crypto platforms could be established at the Moscow and St. Petersburg exchanges next year.