Russia is mining Bitcoin, trying to solve a major trade problem

• Russian companies are using cryptocurrencies for international payments amid sanctions, the Russian Finance Minister said.
• Recent legislative changes have reversed Russia’s previous resistance to cryptocurrencies.
• International banks reduced their transactions with Russia, leading to a shift to alternative payment systems.

Russian companies have found another way to circumvent Western sanctions against commercial payments: cryptocurrency.

Some companies have begun using cryptocurrencies, including bitcoin, to make international payments, Anton Siluanov, Russia’s Finance Minister, told Russia 24 TV channel on Wednesday.

“As part of the experimental system, it is possible to use bitcoins, which we mined here in Russia,” Siluanov said. Reuters translation.

“Such transactions are already happening. We believe that they should be expanded and developed further. I am confident that this will happen next year,” he said.

This development comes in the wake of legislative changes this year Which allows the use of encryption in international payments. The country has also made it legal to mine cryptocurrencies.

Bitcoin It is having a banner the following year Donald Trump Winning the US presidential election. The president-elect promoted cryptocurrencies during his election campaign and ran for cryptocurrencies Paul Atkins As Chairman of the Securities and Exchange Commission.

Bitcoin has cracked the key $100,000 Threshold debuted early this month and is now trading at around $98,000.

Despite its growing importance, Bitcoin is still largely considered a volatile and risky asset. At least two countries – El Salvador and the Central African Republic – have adopted Bitcoin as legal tender.

Russia used to be resistant to cryptocurrencies

Russia’s stance on cryptocurrencies marks a shift in President Vladimir Putin’s administration.

In early 2022 – before the invasion of Ukraine – the Russian Central Bank proposed a ban on the use and mining of cryptocurrencies within the country, citing risks to financial stability and monetary policy.

However, the heavily sanctioned country faces so many problems with international payments that it has changed its position and hastened to establish Alternative payment systemsincluding cryptocurrencies, to facilitate trade.

This development comes as Russia’s international trade improves more difficult than ever, with Global banks from China To the United Arab Emirates, Turkey and Austria Reduce transactions – Even without US dollars.

Russia is worth $300 billion Foreign currency reserves Still frozen too. The G7 countries are discussing how to use it to support Ukraine. In October, the UK used profits from the frozen assets to file Ukraine receives a loan worth $3 billion.

Putin He himself has thrown his weight into cryptocurrencies, saying Bitcoin is a good alternative to forex reserves.

“Legitimate question: Why accumulate reserves if they can be lost so easily?” Putin said at an investment conference earlier this month.

In contrast, Bitcoin can be a compelling alternative.

“Who can ban this? Nobody,” Putin said.