Russia is increasingly turning to Bitcoin and other digital financial assets (DFAs) in international trade. Finance Minister Anton Siluanov confirmed this shift on Dec. 25 during an interview with Russia-24. This move is mainly aimed at getting around Western sanctions. Russia has faced mounting difficulties when trading with major partners like China. Many banks are hesitant to conduct transactions with Russian entities due to the fear of facing consequences from Western regulators.
Legislative Support
Siluanov pointed out that recent legislative changes now allow the use of cryptocurrencies for foreign payments. Russia has passed laws enabling DFAs and Bitcoin to be used in foreign trade. He stated that such transactions are already happening and that the government intends to expand their use even further.
View on Modernizing Trade
The minister emphasized that using DFAs instead of the U.S. dollar in foreign trade is practical and forward-looking. He described it as a step towards modernizing global settlement systems. With Russia’s experimental legal framework for DFAs, put in place in September 2024, these practices are now permitted. Siluanov said, “We can pay for goods with DFAs. It’s also possible to use Bitcoin mined within Russia under this regime.” He also noted that the regulatory groundwork is complete and expressed optimism that these activities will grow and become more common by next year.
The Government’s Stance on Cryptocurrency
Caution in Investments
While Russia is embracing Bitcoin for trade, there is a different view when it comes to personal investments. Finance Minister Siluanov, speaking at an educational event in November when Bitcoin’s price was surging, warned the public against seeing crypto as a way to make quick profits. He said, “I don’t recommend cryptocurrency as a means of investment. There are safer ways to invest and achieve good returns.” This shows that the Russian government has a dual approach – supporting its use in international trade while being cautious about its role in personal investment.
Russia’s Cryptocurrency Framework Developments
Legalization of Crypto Mining
In an effort to boost international trade, Russia took a significant step in August by legalizing crypto mining, including Bitcoin mining. This move was part of the broader strategy to make better use of cryptocurrencies in the international trade arena.
Regional Mining Restrictions
However, the Russian government has also imposed regional mining restrictions. Starting from January 1, 2025, cryptocurrency mining will be banned in 10 regions such as Dagestan, Chechnya, and parts of Donetsk, Lugansk, Zaporizhia, and Kherson. These bans, which will be in effect until March 15, 2031, are meant to deal with power issues related to subsidized energy in these areas. In other areas of the country, miners are required to report their earnings to the Federal Tax Service and follow energy regulations.
Domestic Payment Prohibition
Even though Russia recognized Bitcoin as a financial asset back in 2021, its use as a domestic payment method is still not allowed.
Putin’s Perspective on Dollar and Bitcoin
President Vladimir Putin has criticized the U.S. dollar’s dominance in global finance, accusing the U.S. of weaponizing its currency. He has suggested that Bitcoin could offer an alternative since it operates outside the control of governments.
In conclusion, Russia is making strategic moves to expand the use of Bitcoin in foreign trade as a means to overcome sanctions and enhance its position in global commerce. At the same time, it is implementing regulations regarding mining and maintaining restrictions on domestic use, while also advising caution about cryptocurrency investments. The coming period will show how these efforts unfold and impact Russia’s economic interactions and its role in the cryptocurrency landscape on a global scale.
Related topics:
