Under pressure from sanctions, Russia will provide freedom for cryptocurrency trading in the country

In response to the economic challenges posed by international sanctions, the Central Bank of Russia has taken an innovative step. The bank plans to formally launch a service by the end of the year that would allow international cryptocurrency payments to circumvent sanctions-induced transaction barriers.

According to a report by Bloomberg, Russia is rapidly advancing legislation to legalize cryptocurrency payments. This strategy was implemented to alleviate the increasingly severe challenges posed to Russian companies in international payments by the sanctions imposed by the United States on the war in Ukraine.

Through this new approach, Russian companies will gain greater freedom in financial operations, while also opening up new possibilities for global cryptocurrency applications.

Progress on Russian Cryptocurrency Legislation

On Tuesday, lawmakers in the Russian State Duma held an in-depth second and third reading of the cryptocurrency payments bill. Anatoly Aksakov, chairman of the Financial Markets Committee, expects the drafts to be quickly approved by the Federation Council and expected to be signed into effect by President Putin on September 1. At the same time, they will also discuss a bill aimed at regulating cryptocurrency mining activities.

Aksakov admitted that while there had been previous concerns that legalizing cryptocurrencies could affect the domestic market, the potential of cryptocurrencies in evading Western sanctions has been recognized as a phenomenon that cannot be ignored. The new legislation will subject cryptocurrencies to similar regulations as foreign currencies, providing legal protection to relevant companies to reduce legal risks.

Digital asset analyst Ani Aslanyan stressed the urgency of passing the bill, noting that its purpose is to facilitate cross-border transfers. However, he also warned that the United States could increase surveillance of Russian services and companies, providing them with a cat-and-mouse game to evade sanctions.

It is reported that these new regulations may mainly benefit large exporters, while small and medium-sized enterprises may be excluded, forming a "closed club" mainly participated by large enterprises. In addition, since cryptocurrency mining capabilities are mainly concentrated in the hands of large companies, this may also limit the popularity of transactions.

In addition, the Central Bank of Russia will serve as the main agency for cryptocurrency regulation, while the Federal Financial Supervisory Service, the Federal Tax Service, the Federal Security Service, and the Federal Property Management Service will provide additional regulatory support. Aksakov believes that once the regulatory system is established, companies will be able to conduct trading activities in the cryptocurrency field with more confidence.

Positive change in attitude towards cryptocurrencies

Russia’s legislative move appears to mark a shift in Russia’s stance on digital currencies. Faced with payment difficulties caused by U.S. sanctions for domestic businesses, President Putin has pushed for the regulation of cryptocurrencies to promote their domestic and international adoption. He also emphasized that cryptocurrencies are increasingly becoming a means of payment in international settlements.

Although the Russian central bank initially proposed a ban on cryptocurrencies due to concerns about financial stability, the subsequent change of attitude showed an openness to this emerging field. At the same time, the Russian Central Bank now supports the experimental use of cryptocurrencies in cross-border transactions, also showing its willingness to explore innovative blockchain solutions.

Vladimir Chistyukhin, First Deputy Governor of Russia, said that in the face of challenges in international payments, he advocates considering all possible solutions, including those issues that may not have been favored in the past.

Through this shift, Russia is not only seeking to solve its current economic woes but also laying the foundation for the development of a future digital economy.

Conclusion:

This legislative action by Russia reflects its innovation and adaptability in the field of financial technology. By promoting the legalization of cryptocurrencies, Russia not only provides its companies with new solutions in international transactions, but also establishes its active role in the global digital economy.

It is believed that with the establishment of a regulatory framework, Russia is expected to achieve sustainable development in the cryptocurrency field while contributing to the diversified and balanced development of the global economy.

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