Russia’s Crypto Approval: The Start of a Global Financial Shake-Up? Published By Zafar Naik JULY 24, 2024

Crypto adoption rate has increased globally in the last few years. Countries have shifted their stance from banning them to implementing them in day to day life. Following this, the Russian parliament has approved one such bill today. This bill will allow the use of cryptos for international trades. This is going to make a significant shift in their economic policy. We all know that Russia faces ongoing sanctions which makes it difficult for them to engage in foreign trades.

Rise in Crypto Demand in Russia
After this legislative change, the rise in demand for crypto is going to rise in Russia. They aim to bypass sanctions and maintain their trade flows by adopting digital currencies. This is similar to Iran’s approach. They use domestically mined bitcoin for international transactions despite sanctions. With cryptos playing a crucial role, the economic landscape of Russia is assured to transform.

Global Ripple Effect
Countries like the U.S., China and Turkey are integrating digital currencies into their financial systems. Russia is now following into their footsteps. Russian parliament passing a crypto bill, highlights the trend of crypto global acceptance. However, the U.S. may attempt to counteract Russia’s action as this move poses challenges for the United States. Politicians in the US are increasingly distancing themselves from anti-crypto stances as the upcoming elections add another layer of complexity.

Building the Infrastructure
Russia’s laundering watchdog emphasized the need to accelerate the creation of infrastructure for crypto payments ahead of this parliamentary vote. Businesses affected by sanctions require efficient methods to engage in international markets. The watchdog also warns about the risk associated with cryptos & need for regulatory oversight to prevent illegal activities.

Domestic Challenges
Domestic payments in digital currencies are not allowed in Russia despite the new law. President Vladimir Putin has acknowledged the issues with payment systems as a major challenge for the economy. During a government meeting, he praised the experimental introduction of a digital ruble, a blockchain-based asset backed by the central bank. Additionally, Putin highlighted the need for regulation of mining farms, which consume significant energy and pose risks to power supplies in some regions.

Looking Ahead
Russia is trying to connect its digital currency system with China, Iran and Belarus. These collaborations will help to facilitate the transactions between sanctioned countries. This move will also solidify the role of cryptocurrencies in international trades. This development indicates a broader trend of countries using digital currencies to maintain economic stability amidst geopolitical tensions. Approval of cryptocurrencies for international trades by Russia represents a landmark decision. Cryptocurrencies will reshape the economic policies and global trade dynamics as they continue to gain global acceptance.

Source
https://coinpedia.org/news/russias-crypto-approval-the-start-of-a-global-financial-shake-up/amp/