Russia will legalize crypto for international settlements if a new bill is passed by lawmakers later today.
The new legislation will also address Russia’s sizable crypto mining industry, which the finance ministry says ranks as the third-largest in the world.
The country’s economy has struggled with international transfers since the outbreak of the war in Ukraine in January 2022.
Sanctions by Western financial institutions can make it difficult for Russian companies to complete transactions—even with trading partners like China, India or Turkey.
Anatoly Aksakov, head of the Duma’s financial market committee, told Bloomberg that under the new bill, cryptocurrencies will be held to the same set of regulations as foreign currency—like the U.S. dollar—in Russia.
The new bill will come into effect starting September 1 if it is approved by President Vladamir Putin and senators in the State Duma.
Russia has taken an inconsistent line on crypto for international settlements since the start of the war.
It should be noted that Vladimir Putin signed into law a national ban on using digital assets for payments in 2022.
The country put out a blanket ban on crypto for payments at the start of the war but later, allowed financial services firms to trial crypto for some use cases.
Many heavily sanctioned countries, including Venezuela, already use crypto for their international settlements.
Russian crypto analyst Ani Aslanyan told Bloomberg that he expects crypto participation to remain limited to large- and mid-size companies, due to the difficulty of fulfilling the conditions of the new legislation.
Many firms have already been hit with fines for helping Russian banks use crypto.
Lithuania fined crypto firm Payeer 9.3 million Euro for Russia-related sanction violations last month, for allowing Russian customers to transfer money to EU-sanctioned Russian banks.
Aslanyan told Bloomberg he expects countries like the U.S. to increase their scrutiny of Russian crypto activity in light of the new bill if it is passed.
Russian lawmakers have been public about the need for creative solutions to Russia’s payments issues.
Elvira Nabiullina, governor of the Russian central bank, recently told the press she expects international payment systems not involving Western institutions to eventually emerge in response to sanctions.
Lawmakers are also set to vote on a new bill governing crypto mining.
Russia, which has cheap energy and cold weather ideal for mining in many areas like Siberia, has historically been one of the world’s top crypto-mining nations.
It ranked third in the world in 2024 for Bitcoin production, according to data the Russian finance ministry provided to German news outlet bne Intellinews.
However, Putin has previously warned crypto mining could cause electricity shortages if it is not properly regulated.
