Russia Begins Using Bitcoin In Payments Amid Western Sanctions

Russian companies started conducting international transactions using bitcoin and other digital currencies, following legislative changes allowing such payments.

Finance Minister Anton Siluanov said the move aims to mitigate the effects of Western sanctions, which hindered Russia’s trade with key partners like China and Turkey due to local banks’ reluctance to process Russia-related transactions.

This year, Russia legalized the use of cryptocurrencies in foreign trade and took steps to formalize crypto mining, including bitcoin mining. The country is a global leader in bitcoin mining.

“As part of the experimental regime, it is possible to use bitcoins, which we had mined here in Russia, in foreign trade transactions,” Siluanov said in an interview with the Russia 24 television channel. He confirmed that such transactions are already taking place and highlighted the importance of expanding and developing this method. “I am confident this will happen next year,” he added, noting that digital currencies represent the future of international payments.

The law permits these payments while maintaining a ban on using cryptocurrencies as regular legal tender within Russia. However, the law does not clearly outline rules for these transactions, giving Russia’s central bank authority to oversee an “experimental” regulatory framework.

Central bank Governor Elvira Nabiullina noted that Russia’s business partners in various countries are under “tremendous pressure,” and predicted that a new global payments system independent of Western institutions would eventually emerge.

Putin backs cryptocurrency use

Earlier this month, President Vladimir Putin criticized the U.S. administration for politicizing the U.S. dollar’s role as the global reserve currency, which he argued has led many countries to seek alternative assets. Putin highlighted bitcoin as one such alternative, stating that no global authority could regulate it. His remarks suggest strong support for the broader adoption of cryptocurrencies in Russia.

The law’s details, especially on the practical execution of crypto payments, remain vague. It grants the central bank control over the experimental regime but does not specify the rules for cross-border transactions.

According to Bloomberg, Russia plans to use its National Payment Card System for converting rubles into cryptocurrencies during the trial. If the trial succeeds, crypto platforms could be established at the Moscow and St. Petersburg exchanges next year.