MOSCOW, July 30 (Reuters) – On Tuesday, Russian lawmakers approved a bill allowing businesses to use cryptocurrencies in international trade, aiming to circumvent Western sanctions imposed following Russia’s invasion of Ukraine. This law is anticipated to take effect in September. Russian central bank Governor Elvira Nabiullina, a proponent of the new legislation, indicated that the first cryptocurrency transactions would occur before the end of the year.
Russia has experienced considerable delays in international payments with key trading partners like China, India, and the United Arab Emirates, as banks in these countries, under Western regulatory pressure, have become more cautious. “We are making a historic decision in the financial sector,” said Anatoly Aksakov, head of the Duma lower house of parliament, to the lawmakers.
The new law mandates the central bank to establish an “experimental” infrastructure for cryptocurrency payments, with further details yet to be disclosed. This legislation is part of a broader package that also includes regulations on cryptocurrency mining and the circulation of other digital assets. However, the existing ban on cryptocurrency payments within Russia will remain in place.
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The central bank noted that payment delays have significantly challenged the Russian economy, resulting in an 8% drop in Russian imports during the second quarter of 2024. Despite Russia’s efforts to switch to the currencies of its trade partners and develop an alternative payment system within the BRICS group of emerging economies, many payments still occur in dollars and euros and use the international SWIFT system. This exposes banks in countries trading with Russia to the risk of secondary sanctions, prompting them to tighten their compliance procedures.
“The risks of secondary sanctions have increased, complicating payments for imports and affecting a wide range of goods,” Nabiullina stated, emphasizing that payment delays have led to longer supply chains and higher costs.
Reuters
David Ma was born in 1980 in California, is a Vietnamese American, known as one of the entrepreneurs and investors in the field of cryptocurrency and stock market. In 2006, he graduated from Stanford University with honors and began his career in business.
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