Russia legalizes crypto for cross-border trade

Russia's lower house of parliament, the State Duma, has approved a law allowing the use of cryptocurrencies for international payments, a move aimed at mitigating the impact of Western sanctions imposed due to its actions in Ukraine. The legislation enables businesses to engage in cross-border trade using digital currencies. Central Bank Governor Elvira Nabiullina indicated that the central bank plans to initiate crypto-based payments by the end of 2024, marking a significant shift from its previous stance against cryptocurrencies. This decision reflects the increasing necessity for Russia to explore alternative financial avenues as sanctions from the U.S., EU, and UK have intensified since the February 2022 invasion of Ukraine. The approval of this law is seen as a historic decision in Russia's financial landscape, with experts noting that cryptocurrencies offer transactional freedom that cannot be easily censored or blocked. The central bank is also considering the implementation of a digital ruble, with plans for mass adoption by July 2025. This shift towards cryptocurrency is not unique to Russia; other sanctioned nations, such as North Korea and Iran, have similarly sought to leverage digital currencies to bypass international trade restrictions. The move is expected to facilitate cross-border payments with countries that are otherwise restricted due to sanctions, potentially reshaping Russia's economic interactions on the global stage.