• Russia is exploring using cryptocurrencies in international transactions to avoid sanctions.
• The government is creating new institutions to mine cryptocurrencies and oversee their use for foreign transactions.
• Western nations have previously pressured crypto exchanges to sanction Russian addresses.
Russia Exploring Crypto Use in International Trade
Russia is exploring the viability of using cryptocurrencies in international transactions as it explores avenues to evade sanctions. The country is already working on a draft law to allow crypto use in cross-border settlements. The government will create new institutions to mine cryptocurrencies and oversee their use in international trade.
EU and NATO Sanctions Against Russia
In response to Vladimir Putin’s Russia invading Ukraine, the European Union (EU) and North Atlantic Treaty Organization (NATO) countries moved to discourage Putin’s efforts by attacking Russia’s energy-rich economy with sanctions designed to cut it off from international trade. Ever since the sanctions were imposed, the country has been exploring avenues to circumvent these sanctions, including through the use of blockchain technology and crypto.
Russia Prepares Draft Law
Governor of the Bank of Russia Elvira Nabiullina has said that the country is preparing a draft law to allow for the use of cryptocurrencies in international trade settlements, according to a report by a local news outlet on Tuesday, April 18. Central Bank of Russia Governor Elvira Nabiullina said that the use of cryptocurrencies in external settlements may start as an experiment. The central bank opposes the use of cryptocurrencies domestically, but such funds can be used for external payments. The government plans to create new institutions to mine cryptocurrencies and oversee their use in transactions with foreign entities. Consultation on creating these institutions has already started between the government and the central bank.
Western Nations Fear Crypto Circumvention
Western nations have long feared that Russia would use crypto to evade sanctions and previously pressured crypto exchanges to sanction Russian addresses. This fear was reinforced when energy committee chair Pavel Navalny stated that he was willing settle oil and gas trades with “friendly countries” in Bitcoin back March 2022.. In September last year, Rostec Group claimed they had developed a blockchain platform that could replace SWIFT for cross-border transactions adding more fuel tot he fire about potential circumventions via cryptocurrency usage..
Conclusion
Overall, it looks like Russia is preparing a draft law that allows for cross border settlement with cryptocurrency which may help them avoid western economical sanctions imposed against them due recent political events; however this proposed system still needs approval from top officials before implementation can commence officially