MOSCOW, Dec 25 (Reuters) – Russian companies have started using bitcoin and other digital currencies for international payments, following recent legislative changes that made such transactions possible. These changes were implemented to help Russia navigate and counter the effects of Western sanctions.Finance Minister Anton Siluanov announced on Wednesday that this shift towards digital currencies is a direct response to economic pressures imposed by sanctions, which have restricted Russia’s access to traditional financial systems and institutions.
By adopting cryptocurrencies like bitcoin, Russian companies can bypass these restrictions and continue conducting international trade.This move is part of a broader strategy by Russia to adapt to the changing global financial landscape and maintain economic stability in the face of ongoing geopolitical tensions.Sanctions have significantly complicated Russia’s trade with major partners like China and Turkey, as local banks in these countries have become increasingly cautious with Russia-related transactions. The banks are wary of attracting scrutiny from Western regulators who might impose penalties for engaging with Russian entities in violation of sanctions. This has made it more difficult for Russian businesses to conduct transactions through traditional banking channels.
As a result, many Russian companies have turned to cryptocurrencies as an alternative, as they offer a way to bypass the traditional financial system and reduce reliance on banks that could face pressure from Western authorities. This shift is part of a broader trend where digital currencies are being viewed as a potential solution to navigate the restrictions imposed by the global financial community.In 2024, Russia has taken significant steps to integrate cryptocurrencies into its economy by officially permitting their use in foreign trade. This move was made in response to the ongoing Western sanctions that have complicated traditional financial transactions. By legalizing cryptocurrency payments, Russia aims to maintain and potentially expand its trade relationships, particularly with countries like China and Turkey, which are cautious about using traditional banking systems for Russian transactions.
Furthermore, Russia has also taken measures to legalize cryptocurrency mining, including bitcoin, and is now considered one of the global leaders in bitcoin mining. This is due to the country’s vast natural resources, particularly cheap energy, which make it an ideal location for large-scale mining operations. These efforts are part of a broader strategy to strengthen the country’s digital economy and reduce its reliance on traditional financial infrastructure that is vulnerable to international sanctions.Russian Finance Minister Anton Siluanov emphasized that bitcoin and other digital currencies are already being used in foreign trade transactions as part of an experimental regime. Speaking to Russia 24, Siluanov stated that these transactions, often involving bitcoins mined in Russia, are happening and that he expects them to grow and expand significantly in the coming year. He highlighted that international payments in digital currencies represent the future of global trade, suggesting that cryptocurrency could become an increasingly important tool for bypassing traditional financial systems affected by Western sanctions. This move underscores Russia’s ongoing efforts to establish cryptocurrencies as a viable alternative for international commerce and financial exchanges.
Earlier in December, President Vladimir Putin expressed his belief that the U.S. dollar is being undermined as the global reserve currency by the current U.S. administration’s use of it for political purposes, prompting many countries to seek alternative assets. He pointed to bitcoin as one such alternative, noting that no one in the world has the ability to regulate it. Putin’s comments signaled a strong backing for the wider use of cryptocurrencies, aligning with Russia’s push to leverage digital currencies in international trade. This stance reflects Russia’s broader strategy of reducing dependence on the U.S. dollar and strengthening its economic ties with alternative financial systems, particularly cryptocurrencies.