Russian parliamentarians have recently approved a new measure that recognizes cryptocurrency as a form of payment for international commerce.
Elvira Nabiullina, a Russian central bank chief and one of the law’s proposers, has stated that the initial crypto transactions are expected to occur just before the end of the year, as the legislation is scheduled to be enacted in September.
Russia has encountered substantial delays in international payments with significant trading partners, including China, India, and the United Arab Emirates, as a result of financial institutions in those countries becoming more cautious in response to Western regulators’ pressure.
Speaker of the lower chamber of parliament, the Duma, Anatoly Aksakov, informed MPs that “we are making a historic decision in the financial sector.”
In accordance with the new legislation, the central bank will establish a new “experimental” infrastructure for cryptocurrency payments. The specifics of the infrastructure are still pending announcement.
The law is a part of a bundle that also includes regulations regarding the exchange of other digital assets and cryptocurrency mining. Despite the passage of the new law in Russia, the ongoing prohibition on bitcoin payments remains in effect.
The central bank reported that the Russian imports decreased by 8% in the most recent quarter as a result of the increasing urgency of payment delays in the Russian economy.
Despite Russia’s efforts to convert to the currencies of its trading partners and establish an alternative payment system within the BRICS group of emerging economies, a significant number of payments are still processed in euros and dollars and routed through the global SWIFT system.
Banks in countries that engage in trade with Russia are at risk of secondary sanctions, which necessitates the enhancement of their compliance protocols.
“The risks associated with secondary sanctions have increased.” Nabiullina underscored that payment delays had led to longer supply chains and higher prices, which affect a wide range of products.
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