Turned around! Russia uses Bitcoin for international payments to cope with sanctions.

Russia has made significant changes in digital currency, announcing that it will allow enterprises to use BTC and other cryptocurrencies for international payments. This move is part of a larger strategy aimed at circumventing economic sanctions imposed by Western countries and reducing reliance on the US dollar.

According to recent reports, officials including Russian Finance Minister Anton Siluanov have stated that Russia has begun using digital financial assets (DFA), especially BTC mined domestically, for international transactions. Siluanov confirmed that Russian companies have started using Cryptocurrency for foreign trade (cross-border transactions), emphasizing the need to mitigate the economic impact of Western sanctions.

This strategic move comes after recent legislative developments in Russia. In July, the Russian parliament passed a law allowing the use of digital currency in cross-border trade. By November, President Putin had formally signed the legislation, recognizing cryptocurrency as property for foreign trade purposes. The legislation introduced tax benefits for digital transactions and exempted cryptocurrency mining and sales from value-added tax.

Putin also publicly supports digital currency, calling it an unstoppable tool to enhance economic efficiency and stability. Siluanov also expressed optimism about the expanding application of cryptocurrency in international trade next year. He said, "As part of the experimental system, we can use the BTC we mine in the Russian Federation."

In addition, Siluanov also said in an interview that the implementation of Digital Financial Assets (DFA) as a substitute for the US dollar in foreign trade is "completely understandable" in the current situation, as it can leverage modern infrastructure, which is an innovation in the global settlement system, and he added, "This is the future."

The Minister of Finance also mentioned that Russia legalized the mining industry earlier this year, 'This is the reason why such transactions are taking place. We said they need to be developed and expanded, and I believe this will become a reality next year.'

In addition to Bitcoin, blockchain analytics company Chainlysis said that stablecoins such as USDT and USDC also play a role in international trade in Russia. These digital assets provide high liquidity, but their centralized control may pose challenges to their broader use.

A six-year ban on cryptocurrency mining will be implemented in 10 regions by 2025.

In addition, Russia is continuing its trial of the digital ruble, aiming to integrate with Cryptocurrency in international trade. The digital ruble has been in trial since August 2023, with about 30 companies and 11 cities currently using the currency.

Despite the transition to digital currency, the Russian government has approved a law, according to TASS, which will completely ban cryptocurrency mining in 10 regions from January 1, 2025 to 2031, lasting for six years. This decision is in response to the increasing energy demand of the cryptocurrency mining industry and local power shortages.

The regions affected by the ban include the Republic of Dagestan, the Republic of Ingushetia, the Kabardino-Balkarian Republic, the Karachay-Cherkess Republic, the Republic of North Ossetia, the Chechen Republic, as well as the Donetsk and Luhansk People's Republics annexed by Russia. In addition, certain areas of the Zaporizhia and Kherson regions will also be included in the ban. The ban will remain in effect until March 15, 2031.

In order to alleviate the power shortage exacerbated by the high energy demand of mining operations, the Russian government has also announced the implementation of seasonal restrictions on mining in the Irkutsk, Buryat, and Outer Baikal regions of Siberia from January 1st to March 15th, starting from January 1st, 2025. The restriction period will be changed to November 15th to March 15th in the following years.

The Russian government emphasizes the necessity of fair distribution of energy, especially during the winter when energy demand surges. This decision was made after President Putin signed a bill authorizing the government to impose restrictions based on regional energy demand.

This binary opposition indicates that the government is carefully balancing its domestic and international Crypto Assets strategies to alleviate the financial burden of sanctions while managing the impact of mining activities locally.

The world is closely watching the progress of Russia's use of cryptocurrency in international trade. Siluanov predicts that digital currency will be more widely used in the near future. This move may set a precedent for other sanctioned economies that want to diversify their financial systems.

Russia turns to BTC for international payments to cope with sanctions, according to an article originally published in Block chain News.