Russia’s finance minister, Anton Siluanov, has revealed that domestic companies are using Bitcoin (BTC) and other cryptocurrencies for international payments.
The shift comes after several legislative changes to allow such transactions to counter sanctions imposed by Western nations.
Russia Already Using Bitcoin In Foreign Trade
Siluanov’s admission comes as Russia turns to crypto to beat sanctions imposed on it following its invasion of Ukraine. The sanctions have significantly compromised and complicated the country’s ability to trade with major partners like China and Turkey. This is because foreign banks have become increasingly reluctant to trade with their Russian counterparts to avoid scrutiny from Western regulatory authorities.
Cryptocurrencies, primarily Bitcoin, have emerged as a viable alternative for Russia and its domestic companies to conduct international trade without relying on the US Dollar or the Society for Worldwide Interbank Financial Telecommunication (SWIFT)-based payment systems. Russia introduced legislation to permit the use of cryptocurrencies in foreign trade. It also legalized Bitcoin mining and has established itself as a global leader in mining. Siluanov stated,
“As part of the experimental regime, it is possible to use bitcoins, which we had mined here in Russia (in foreign trade transactions).
The finance minister also noted that several Russian companies have made cross-border transactions using Bitcoin, and the country intends to expand and develop digital payments.
“Such transactions are already occurring. We believe they should be expanded and developed further. I am confident this will happen next year.”
Dollar On Shaky Ground?
Earlier this month, Russian President Vladimir Putin said that the current US administration had severely undermined the US Dollar’s role as a reserve currency, claiming the currency is being used for political purposes. This, according to Putin, has prompted many currencies to look for alternatives to the Dollar. Putin used Bitcoin as an example, adding that no country in the world had the ability to influence or regulate it. The president’s comments indicated that Russia favors the extensive use of cryptocurrencies for cross-border payments.
Russia Contemplating Strategic Reserve
Russia could also join several nations in creating a strategic Bitcoin reserve. According to several media reports, Anton Tkachev, a State Duma deputy from the New People party, has proposed establishing a strategic Bitcoin reserve. The proposal highlights Bitcoin’s potential as a hedge against Western sanctions, a financial stabilizer, and an investment vehicle.
“With limited access to traditional international payment systems for countries under sanctions, cryptocurrencies are becoming virtually the only tool for international trade. The Central Bank of Russia is already preparing to launch an experiment on cross-border payments in cryptocurrency.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
