Russian companies are circumventing Western sanctions by using Bitcoin and other cryptocurrencies to settle international trade, the country’s Finance Minister, Anton Siluanov, confirmed yesterday (Wednesday).
"As part of the experimental regime, it is possible to use bitcoins that we have mined here in Russia [in foreign trade transactions]," Siluanov told the Russia 24 television channel (translated from Russian).
"Such transactions are already occurring," the minister added. "We believe they should be expanded and developed further. I am confident this will happen next year."
Avoiding Sanctions with Bitcoin
Russia has been heavily sanctioned by Western countries following its invasion of Ukraine. Western nations even banned multiple Russian banks from accessing SWIFT, the messaging network banks use to settle international transactions.
Although the Western world has stopped trading with Russia, the country continues to engage with China, India, Turkey, and some other international trading partners. However, with ongoing Western sanctions, payments for international trade have become complicated. Russia and its trade partners are also experimenting with using their own currencies to settle trade payments.
The Russian Finance Minister's confirmation followed remarks by President Vladimir Putin, who recently highlighted Bitcoin's resilience, stating that no government can effectively ban it. A Russian lawmaker also recently proposed adding Bitcoin to the country’s reserves to mitigate geopolitical risks.
New Rules on Bitcoin Mining
Interestingly, Russian authorities have approved a list of regions where cryptocurrency mining will be banned starting 1 January 2025. The ban will last for six years, ending on 15 March 2031. These measures align with cryptocurrency mining laws signed by President Putin in August and October 2024, which aim to manage energy consumption.
Meanwhile, the US is expected to shift its policies in favour of cryptocurrencies. US President-elect Donald Trump has openly endorsed Bitcoin and even referred to himself as “the first Bitcoin President.” His nominations for key positions in US agencies and regulatory bodies also reflect a pro-crypto sentiment.
Against this backdrop, the demand for Bitcoin is rising. The cryptocurrency briefly surpassed the $100,000 milestone following the US elections and is now trading above $95,000 after some price corrections.
This article was written by Arnab Shome at www.financemagnates.com.
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