Russian Finance Minister Anton Siluanov announced on Wednesday that domestic firms are now embracing Bitcoin and other digital assets for international payments. This shift comes in response to legislative changes aimed at mitigating the impact of Western sanctions.
These sanctions have created hurdles for Russia’s trade relationships with key partners like China and Turkey. Local banks are proceeding cautiously, wary of potential regulatory repercussions from Western authorities.
In a statement to a Russian television channel, Siluanov indicated, “As part of the experimental regime, it is possible to use bitcoins, which we had mined here in Russia, for foreign trade transactions. Such transactions are already happening, and we believe these opportunities should be expanded and developed further. I am confident this will occur next year.”
Putin Supports Bitcoin as a Viable Option
Earlier this month, President Vladimir Putin expressed his thoughts on the diminishing role of the US dollar as the global reserve currency, largely due to its use as a political tool. This situation has led many nations to consider alternative assets, with Bitcoin highlighted as a prime candidate due to its global regulatory resistance. These comments seem to reflect Putin’s support for increasing cryptocurrency usage.
This month, Bitcoin’s price surged above $100,000, sparking global interest and resulting in an 8% rise in crypto exchange web traffic in Russia, according to reports from MegaFon. The rising popularity is also supported by regulatory changes and global market trends. MegaFon noted that there has been an 8%-10% monthly increase in visits to the top 20 exchanges globally, with Russian users accounting for 27%-30% of overall traffic.
Expansion, Enforcement, and Long-Term Bans
In a strategic move, Russia has now allowed the use of cryptocurrencies in foreign trade while pushing to legalize Bitcoin mining, aiming to secure its position as a principal Bitcoin mining nation. However, authorities have intensified efforts against illegal crypto-mining operations, particularly in the Irkutsk region. The Irkutsk Electric Grid Company, in conjunction with law enforcement, recently dismantled an unauthorized operation that was using over 200 ASIC rigs and consuming about 600,000 kWh monthly—equivalent to the energy consumption of 80 to 100 homes. Although registered as a business, the operation failed to meet the necessary requirements for crypto mining registration.
Amidst these efforts, Russia has also extended its winter crypto-mining ban to 2031, targeting regions such as Dagestan, Chechnya, and Siberia. This ban, effective from January 2025, will impose restrictions during peak energy consumption periods. Recently, crypto mining has been responsible for 1.5% of national power usage, leading to imbalances in electricity payments and stress on the power grid.
With these developments, Russia is making strides in the cryptocurrency landscape, balancing innovation and regulation as it seeks to navigate new economic realities.
