Russia Is Creating a Legal System For Crypto To Avoid Western Sanctions
Russia is moving to integrate crypto into its international commerce. The government announced today that it will legalize its use for foreign trade settlements.
This decision is a strategic response to Western sanctions. By establishing a legal system for cross-border crypto payments, Russia can bypass restrictions on traditional banking channels.
Russia’s Ministry of Finance and Central Bank have formally agreed to legalize cryptocurrency to settle international trade deals.
This decision formalizes the experimental legal regime (ELR) launched in September, which initially permitted the piloting of crypto for cross-border transactions.
The move is widely viewed as a strategic measure to provide Russian businesses with an alternative payment channel. Doing so can ease the strain caused by Western sanctions on the country’s access to traditional global banking.
The new legislation will be accompanied by strict regulation and enhanced oversight. According to Finance Minister Anton Siluanov, despite the strategic goal of sanctions relief, regulators remain intensely focused on controlling the inherent financial risks associated with decentralized cryptocurrencies.
Proposed oversight measures will include stringent Anti-Money Laundering (AML) and Know-Your-Customer (KYC) standards enforced by the Federal Financial Monitoring Service. Meanwhile, all crypto transactions will be processed through a regulated infrastructure under the direct supervision of Russia’s Central Bank.
The new legal framework only applies to foreign trade settlements and maintains the ban on using cryptocurrency for domestic payments within Russia. Regulators designed this core policy to protect the ruble’s financial stability.
Russia’s decision to legalize cryptocurrency for foreign trade settlements is a strategic response to the severe economic pressure imposed by Western nations following its invasion of Ukraine in February 2022.
