Russia to Allow Crypto Payments for International Trade to Evade Sanctions

Russian lawmakers have approved a bill allowing the use of cryptocurrencies in international trade to circumvent Western sanctions imposed after Russia's invasion of Ukraine. The new law, set to take effect in September, will enable businesses to use digital currencies for foreign transactions, with the first such transactions expected before the end of the year.

The legislation will establish an "experimental" infrastructure for cryptocurrency payments, details of which are still pending. It also includes regulations on cryptocurrency mining and digital asset circulation but maintains the current ban on cryptocurrency payments within Russia.

Russia has faced delays in international payments with major partners like China, India, and the UAE, leading to an 8% drop in imports in the second quarter of 2024. Despite efforts to use alternative currencies and payment systems, Russia remains dependent on transactions in dollars and euros via the SWIFT system, which subjects banks to secondary sanctions. Governor Elvira Nabiullina highlighted that these sanctions have complicated payments and increased costs.

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