Russia Allows Digital Asset Payments for International Transactions: Can Vladimir Putin Beat Sanctions?

This result marks the highest in Russia’s post-Soviet history, underscoring Putin’s dominant hold on power. Putin interpreted the overwhelming win as validation of Russia’s stance against the West and its military actions in Ukraine. International observers  from the United States, Germany, the United Kingdom, and other countries, have, however, questioned the election’s legitimacy, citing the lack of freedom and fairness due to political repression and media censorship.

Key Takeaways

• Russia legalizes digital assets for international trade.
• Putin said the Central Bank of Russia will be charged for regulating all digital transactions
• This move is aimed at sidestepping sanctions.

Russia has officially incorporated  digital assets into its payment systems for international transactions through new legislation.

Reelected president Vladimir Putin has enacted a law that sanctions the use of digital assets for international settlements. This move addresses a gap in the law. Meanwhile, Putin designated the Central Bank of Russia to supervise these operations.

Russia Advances Digital Asset Legislation: Putin Signs New Laws

Recently, Russia broadened its financial legislation to include further applications for digital assets. Putin enacted amendments  that allow the use of digital assets in international transactions, marking an approach not previously covered by law.

This newly signed legislation  assigns the Central Bank of Russia the authority to regulate these transactions, granting it the power to impose specific conditions and prohibitions. Additionally, the law encompasses transactions involving digital asset exchanges between residents and non-residents, as well as between two non-residents.

Local reports  suggest that Russia’s latest legislative moves to integrate digital assets into its financial system aim to tackle existing and potential payment difficulties stemming from international economic sanctions.

Although Russia had previously considered digital assets as a means to facilitate payments unaffected by these sanctions, there was no formal regulation in place to support such use. The recent laws mark a strategic effort to formalize the role of digital assets in circumventing financial barriers.

New Law Follows Calls for BRICS Blockchain-Based Payment System

The enactment of Russia’s digital asset law aligns with previous statements from Russian officials advocating the use of blockchain technology and Central Bank Digital Currencies (CBDCs) as the foundation for a payment system within the BRICS bloc. Led by Russia and including Brazil, India, China, South Africa, along with new members Saudi Arabia, the United Arab Emirates (UAE), Iran, Egypt, and Ethiopia, the group aims to establish a cost-efficient and politically neutral payment alternative utilizing these digital assets.

Notably, Russia and China, two leading economies in the bloc, are at the forefront of CBDC experimentation. Russia is advancing with its digital ruble pilot, while China has already introduced the digital yuan into circulation.

Putin Wins Record Election, Eyes West

In Russia’s recent election, President Vladimir Putin achieved a landmark victory , securing around 87.8% of the vote.

This result marks the highest in Russia’s post-Soviet history, underscoring Putin’s dominant hold on power. Putin interpreted the overwhelming win as validation of Russia’s stance against the West and its military actions in Ukraine. International observers  from the United States, Germany, the United Kingdom, and other countries, have, however, questioned the election’s legitimacy, citing the lack of freedom and fairness due to political repression and media censorship.

About the Author

Teuta Franjkovic

Teuta is a seasoned writer and editor with more than 15 years of experience. She has expertise in covering macroeconomics and technology as well as the cryptocurrency and blockchain industries. She has worked for several publications as a journalist and editor, including Forbes, Bloomberg, CoinTelegraph, Coin Rivet, CoinSpeaker, VRWorld and Arcane Bear. Teuta began her professional career in 2005, working as a lifestyle writer at Cosmopolitan in Croatia. From there, she branched out to several other publications, covering mainly business and the economy. She then turned her attention to the world of cryptocurrency and blockchain, believing that crypto is among the most important inventions in the history of humanity. Her involvement in fintech began in 2014 and she has since lent her expertise in writing, editing and gathering information about the world of crypto, blockchain, NFTs and Web3. An all-round news hound, mentor, editor, and writer, Teuta enjoys teamwork and good communication. She holds a WSET2 diploma and has a thing for chablis, punkrock music and shoes. She also holds a double MA in Political science and Entrepreneurship.

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