Russian lawmakers have approved a new law allowing the use of cryptocurrency in global trade settlements. This decision comes as Russia faces financial pressure from Western sanctions. On Tuesday, the State Duma, the lower house of the Russian Parliament, gave initial approval to the legislation. This new law will enable businesses to use cryptocurrencies for cross-border trade.
The head of the Duma Anatoly Aksakov called it historic for the financial sector. As Mati Greenspan, CEO of crypto market research firm Quantum Economics, pointed out, it does make sense since Bitcoin transactions cannot be stopped by any government or bank. He added that previously, Russia would not permit such a level of transactional freedom to its citizens, but now crypto usage in the commerce sector is just too large to be ignored.
The price of Bitcoin has risen in the last year, rising by over 100% due to increased expectations of approval of the first U.S spot Bitcoin exchange-traded funds and expectation of the halving event of Bitcoins which slows down the issue of new Bitcoins. At the moment, one Bitcoin costs $66 000, which jumped more than 120% in the last year.
Russia Adopts Crypto for Cross-Border Payments to Counter Western Sanctions
This change in legislation is one of the measures that Russia is taking to overcome the economic challenges imposed by the West. To address these challenges, Russia includes cryptocurrencies in its worldwide payment systems to counter these sanctions. The new law gives authority to the Central Bank of Russia to launch a pilot project on the use of cryptocurrencies in cross-border payments that will assist Russia in bypassing challenges from the SWIFT system as well as the dominance of the US dollar and Euro.
Lastly, Russia is spearheading the promotion of the BRICS Bridge project which involves Brazil, India, China, and South Africa aiming to ease the use of local currencies in trade. The goal of this strategy is to weaken the influence of Western financial networks and enhance economic cooperation within the BRICS countries’ union.
