Russia is working rapidly to utilize crypto as payment for international trades. In just two months, the lower house of parliament passed bills which were signed by the president, allowing to swiftly move to payment testing.
Why Russia Needs Crypto
Western regulators imposed sanctions over Russia in 2022 when they launched a war over Ukraine. These sanctions forced their trade partners to withdraw support. SWIFT services handle international transactions but only work with the US Dollar and Euro. To perform any kind of trade, the central bank of those countries will need to use SWIFT for transactions which can invite sanctions. This started harming Russian international trade, necessitating a payment system nobody can control – a decentralized one – cryptocurrency.
The Russia Crypto Bills
On July 31, 2024, the Russian parliament passed two crypto bills. One will allow using cryptos for international payments, and the other will permit specific institutions to mine crypto. After passing in parliament, these bills were sent for presidential signature. President Vladimir Putin signed these crypto bills on August 8, 2024.
Infrastructure Setup for Crypto Trials
With everything approved, Russia is in setup mode for crypto payments. They plan to use their existing National Payment Card System (NPCS) for these payments. Russia set up this system in 2014, and it manages Mir payment cards and interbank systems. By September 1, Russia will start trials using the existing NPCS infrastructure. The Central Bank of Russia is tightening its grip on NPCS to keep the system highly regulated. Once trials succeed, the Moscow and St. Petersburg Currency Exchanges might create crypto platforms next year.
Russia is set to start testing its crypto payments system. It will be interesting to see which countries they will begin these trials with, given the limited number with regulations for international crypto transactions and even fewer willing to trade with Russia with the threat of Western sanctions.
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