Russia Legalizes Bitcoin Mining And Cross-Border Crypto Trade As Economic Sanctions Bite
In a major development, Russian lawmakers passed a bill to legalize the use of Bitcoin (BTC) and other cryptocurrencies for international trade, as companies grapple with increasing difficulties in foreign payments under the threat of Western sanctions over its invasion of Ukraine.
The lawmakers also voted to fully legalize crypto mining in Russia from November 1, 2024.
Russia Legalizes International Payments In Crypto
The lower house of Russias parliament, known as the State Duma, approved legislation allowing cryptocurrency use for global settlements. On Tuesday, legislators of the State Duma gave the first greenlight to the new law, which would permit businesses to use crypto for cross-border trade.
We are taking a historic decision in the financial sphere, Anatoly Aksakov, the head of the Duma, told lawmakers Tuesday according to a Reuters report.
Aksakov noted that Russia previously had concerns about legalizing crypto but now considers its use as an objective phenomenon that requires regulation. He told Bloomberg that under the new law, global decentralized crypto assets will be held to the same set of regulations as foreign currency such as the U.S. dollar, in Russia. The Bank of Russia would serve as the primary regulator for all crypto and digital asset matters.
While crypto trading and payments inside Russia will still be banned, President Vladimir Putin recently urged officials to regulate digital assets domestically and for foreign transactions.
Crypto is increasingly used in the world as a means of payment in international statements, Putin posited in a statement.
Reports say the law is expected to take effect by Sept. 1 and that the first crypto transactions could occur before the end of the year.
Mining Regulation
The Russian Duma also passed a law legalizing crypto mining in the country from Nov. 1, 2024. Entities and individual entrepreneurs registered with the Ministry of Digital Development can engage in mining, while those not registered can only operate mining rigs if they do not surpass energy consumption limits, Ria Novosti reported.
Russia, which has affordable energy and cold weather suitable for mining in many areas, such as Siberia, has historically been one of the leading crypto-mining countries in the world. It ranked third globally in 2024 for BTC mining, data the Russian finance ministry provided to German news outlet bne Intellinews shows.
Pressure From Sanctions
Russias decision to legalize crypto comes as businesses in the country face mounting payment pressures from international sanctions. The United States, the European Union, and the U.K. are among the jurisdictions that levied harsh economic sanctions on Russia after its February 2022 invasion of Ukraine.
The Russian Central Bank had previously called for a blanket ban on cryptocurrencies, citing risks to financial stability and monetary sovereignty. However, the growing need to circumvent foreign sanctions has forced the Bank of Russia to reevaluate its stance.
Text source: ZyCrypto
