Anamika Dey, editor
Brief news
- Russia is considering legalizing cryptocurrency for international payments in response to Western sanctions.
- The State Duma, the lower house of the Russian Parliament, is expected to approve a bill authorizing cryptocurrency settlements.
- Russia’s central bank is also exploring the use of cryptocurrency for cross-border transactions and aims to implement crypto-based payments by the end of 2024.
Detailed news
Russia is contemplating the constitutionality of cryptocurrency for international payments in response to the persistent financial strain imposed by Western sanctions.
The governor of Russia’s central bank, Elvira Nabiullina, announced on Tuesday that the State Duma, the lower house of the Russian Parliament, will take up a bill on Tuesday that would authorize international payments via cryptocurrencies.
Nabiullina stated in the Russian Federation Council, the upper house of Russia’s parliament, that the State Duma is currently contemplating a law that permits cryptocurrency settlements within the context of an experimental regime. This information was reported by the state-owned news agency RIA Novosti.
The law is anticipated to be approved by the Duma on Tuesday, according to a separate report from Reuters.
Russia’s central bank is also exploring the use of cryptocurrency to facilitate cross-border transactions. According to its chief executive, crypto-based payments will be implemented by the conclusion of 2024.
“We are currently in the process of negotiating the terms of the experiment with ministries and departments, as well as with businesses. We anticipate that the initial payments will be made before the end of the year,” she stated.
When CNBC reached out to the Russian Embassy in London on Tuesday, they were unable to provide an immediate response regarding the country’s intentions to enact legislation that would promote cryptocurrency.
The regulator’s previous posture on the technology is reversed by the central bank’s commitment to employ crypto as a method of cross-border payment.
The Russian central bank proposed in January 2022 to prohibit the mining of digital currencies and the use of crypto for transactions, citing concerns regarding financial stability, citizens’ welfare, and monetary policy sovereignty.
As a result of sanctions
In response to Russia’s invasion of Ukraine, the United States and its allies have implemented numerous sanctions against individuals and entities in Russia. This has occurred amid escalating tensions between the two countries.
The process by which Wall Street developed an appreciation for bitcoin
After the Russian invasion of Ukraine in February 2022, sanctions were implemented by the United States, the European Union, and Britain. President Vladimir Putin, Russia’s financial sector, and numerous oligarchs have been the targets of their ongoing pressure on the country.
Additionally, Russia is investigating the potential of a digital ruble.
CBDCs, or central bank digital currencies, are distinct from cryptocurrency. In contrast to bitcoin
Similar to other cryptocurrencies, CBDCs are issued directly by a government and are intended to replicate fiat currencies in the form of a digital token. They are not governed by a central authority.
Interfax, a Russian news agency, reported that Central Bank Governor Nabiullina stated on Tuesday that the regulator will endeavor to transition from a pilot phase to the mass implementation of the digital ruble starting in July 2025.
Is it possible for countries to circumvent sanctions through the use of cryptocurrency?
Cryptocurrencies have been employed by other sanctioned nations to circumvent these financial restrictions.
North Korea has been accused of raising millions of dollars in cryptocurrency to assist in the funding of a variety of state programs and to circumvent foreign sanctions on numerous occasions.
The Ronin Network, a blockchain that facilitates the popular nonfungible token (NFT) game Axie Infinity, was the site of a significant theft perpetrated by the North Korean state-backed hacking organization Lazarus. Blockchain analysis firms Elliptic and Chainalysis have previously reported that cybercriminals absconded with more than $600 million in digital tokens as a result of the breach.
However, advocates of cryptocurrencies also assert that the digital assets are a valuable instrument for combating illegal activities. This is due to the fact that the networks that serve as their foundation, known as blockchains, are public and maintain a cryptographically secure historical record of transactions that is impervious to modification.
Source : CNBC News
