Why Russia’s Crypto Policy Could Be Taking a U-Turn
- Russia reconsiders its crypto policy amidst international sanctions.
- Proposed regulatory changes aim to leverage crypto.
- The shift reflects a broader reevaluation of cryptocurrency’s role in Russia.
Crypto’s importance in global geopolitics is growing, as seen from the actions taken by one major player. Amidst the ongoing conflict with Ukraine and the subsequent international sanctions, Russia has made a U-turn on its stance on crypto.
Historically skeptical about digital currencies, Russia’s latest moves suggest a potential pivot towards embracing crypto for international payments.
Why Russia’s Legalized Bitcoin Mining and Trade
Amid ongoing sanctions after the war in Ukraine, Russia seeks to leverage crypto to mitigate the damage to its trade. On Thursday, July 25, reports revealed that Russia and China are turning to digital payments to circumvent the limitations imposed by sanctions.
Sponsored
This development marks a stark contrast to Russia’s previous policies, which were predominantly against the adoption of cryptocurrencies due to concerns over financial stability and regulatory control.
Earlier, on July 17, Russia announced its consideration of crypto for international payments . The sanctions, largely cutting off Russia from traditional financial systems, have pushed the nation to explore alternative methods to sustain its trade.
Crypto could mitigate the adverse effects of international sanctions that have disrupted Russia’s trade. Thanks to international sanctions, even trade with its partners, like China, India, the United Arab Emirates, and Turkey is disrupted. Moreover, the regulation seeks to bring mining operations into the formal economy.
Why Russia Banned Crypto in the First Place
Russia’s relationship with cryptocurrencies has been complex. Initially, Russia had a skeptical stance towards digital currencies, primarily due to concerns over financial stability and the potential for illegal activities such as money laundering, drug trafficking, and terrorism financing.
Sponsored
Another significant factor in Russia’s stance on cryptocurrencies is its push for a digital ruble. The Russian government has been actively developing a central bank digital currency (CBDC) as a state-controlled alternative to private crypto. For Russia, the digital ruble offers the benefits of digital transactions while maintaining government control over the monetary system.
Cryptocurrency mining, particularly Bitcoin mining, has been another major concern for Russia. The country is the third-largest Bitcoin mining hub in the world, with mining consuming significant amounts of electricity. Earlier, Russian President Vladimir Putin warned that mining could cause blackouts, as the country is fighting a war in Ukraine.
On the Flipside
- Sanctions have forced crypto exchanges, including Binance , to exclude some Russian users.
- Several outlets have reported that Russia passed a bill legalizing crypto mining and international trade. However, Russian media did not report on this development.
Why This Matters
Russia’s shifting stance on crypto showcases that digital assets have a growing role in international payments. Thanks to this role, Russia can use crypto to mitigate the effects of the sanctions.
Read more about Russia’s stance on crypto:
Russia Clamps Down on Digital Assets
Read more about why celebrity tokens are down:
Every Solana Celebrity Crypto is Massively Down: Here’s Why
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Bitcoin and Ethereum ETFs drop to new lows after week of bearish price action
The total value held by U.S.-based spot Bitcoin ETFs is currently at its lowest level since May 1 after Bitcoin’s price declined this week.Spot Ethereum ETFs have hit their lowest total asset value yet recorded after similar price action.
![](https://img.bitgetimg.com/multiLang/image/social/6db8e06e6ab60f0837986dac6a5867251725661552636.jpg)
Top Analyst Data Suggest Massive Buy Signals For Mpeppe and Solana (SOL), Here’s Why
![](https://img.bitgetimg.com/multiLang/image/social/f0e85376920387dd87b1488fb83d06631725723045875.jpg?fit=460,271)
![](https://img.bitgetimg.com/multiLang/image/social/82ba79ccb9085525e30bedec921c20741725723045506.jpg?fit=460,299)
TON Foundation Launches $23.7M DeFi Initiative to Supercharge Liquidity
![](https://img.bitgetimg.com/multiLang/image/social/6668f80d7b67f8f725f7f1caca2fb3611725725707561.jpg)