Russia is actively using Bitcoin and other cryptocurrencies to counteract the impact of Western sanctions on its economy, Reuters reported on Dec. 25.
The report cited Finance Minister Anton Siluanov, who recently stated that Russian companies have begun to utilize digital currencies, particularly Bitcoin mined within the country, for international transactions. He reportedly said:
Besides Bitcoin, blockchain analysis firm Chainlysis suggested that stablecoins like USDT and USDC play a role in Russia’s international trade. These digital assets offer high liquidity, but their centralized control could challenge their broader adoption.
This strategic move comes after Western nations imposed sanctions following Russia’s actions in Ukraine. These measures have significantly restricted the ability of Russian firms to engage in international trade through conventional banking systems.
As a result, Russia has sought alternatives, with cryptocurrencies becoming a prominent solution.
In July, Russian legislators passed a law permitting the use of digital currencies in cross-border trade. By November, President Vladimir Putin had formalized legislation categorizing cryptocurrencies as property for foreign trade purposes. This move introduced tax incentives for digital transactions and exempted crypto mining and sales from VAT.
Putin has also openly supported digital currencies, describing them as unstoppable tools to enhance economic efficiency and stability.
Siluanov echoed this sentiment, expressing confidence that crypto adoption in international trade will grow in the coming year. He said these measures will continue expanding, providing Russian companies greater flexibility in navigating global markets.
“We believe they should be expanded and developed further. I am confident this will happen next year.”
Despite these advancements, Russia’s crypto adoption has limitations. For context, the government plans to enforce a six-year mining ban in ten regions starting in January 2025 to address energy concerns.