The BRICS bloc has taken a step into digital finance, as Russia has legalized crypto payments for trade. A bill recently passed in the lower house of parliament marks a key moment in the country’s approach to digital currencies, especially for international deals.
Russia’s crypto legalization move comes as the nation faces money problems due to international sanctions. Amid the bloc’s de-dollarization efforts, the bill that was passed on Tuesday is set to open new cross-border payment methods. This will undoubtedly fortify Russia and BRICS continued move away from the US dollar.
Also Read: Currency: USD In Trouble As Putin Proposes Crypto To Evade US Sanctions
From Russia with Crypto: Cross-Border Payments and the Digital Ruble Revolution
New Law Paves the Way for Crypto in BRICS Trade
A newly passed law has seen Russia legalize crypto for trade. The legislation is set to go into effect in September, with Central Bank Governor Elvira Nabiullina saying the first cryptocurrency settlement trade will take place before the end of 2024.
The law will also debut regulations on both crypto mining and the circulation of other tokens. Yet, it will not abolish the former ban on crypto payments within the country itself. It should still have a massive impact on BRICS and its international trade capabilities.
This change is driven by the need to work around problems in international transfers caused by Western financial sanctions. Big and medium-sized companies benefit most from this new system, though strict rules may limit wide use.
For the BRICS bloc, the move continues to grow de-dollarization approaches. The use of native currencies, and now digital assets, should unify unilateral trade away from the greenback. With Russia signing notable trade agreements throughout this year, that could be bad news for the Western currency.
The Digital Ruble: Russia’s CBDC Initiative
Along with the crypto legalization efforts, the Bank of Russia is working on its central bank digital currency (CBDC), the digital ruble. Governor Elvira Nabiullina has shared plans for a full launch by July 2025 after successful test runs.
Implementation Strategy
The digital ruble’s rollout is planned as a step-by-step process, with tests now involving 12 banks and 600 workers. These tests cover key functions like wallet use, transfers, and automatic payments.
Also Read: Russia Proposes Allowing Bitcoin Trading For Certain Investors
Challenges and Considerations
While Russia’s crypto plans show promise, they face big hurdles. Other countries are likely to watch more closely, with the US expected to increase its checks on Russian crypto activities. Recent fines on crypto firms for breaking sanctions show the complex rules they must follow.
Also, businesses unfamiliar with these technologies may slowly adopt crypto for international payments and the digital ruble. Overcoming these barriers will be key to Russia’s digital currency plans’ success.
Global Impact of Russia’s Crypto Embrace
Also Read: BRICS: Russia and Iran to Officially Ditch the US Dollar
Russia’s move towards crypto legalization and launching a CBDC could widely affect global finance. As one of the world’s largest economies explores new payment systems, other nations may rethink their approach to digital currencies.
How well Russia’s crypto plans work could shape the future of cross-border payments and digital currencies in world trade. It may also speed up the growth and use of CBDCs in other countries looking to update their financial systems and rely less on traditional banking networks. Still, the world watches closely as Russia leads BRICS at the edge of a financial shift.