Russia intends to mine cryptocurrency for international trade

The nation has been subject to international sanctions that will keep it out of the U.S. dollar-powered global payment infrastructure.

Russia is one of the biggest nations in the world, where cryptocurrency is still used and regulated in part. Despite introducing a framework for regulating cryptocurrency on January 1, 2021, Russia kept a sizable portion of the business uncontrolled. The Russian central bank had recommended a framework for a total ban on the cryptocurrency industry in Q3 2021, but things changed after the crisis between Russia and Ukraine in Q1 2022.

The head of the central bank, Elvira Nabiullina, recently stated during a meeting in the State Duma that the Russian Central Bank will permit the use of cryptocurrencies in the cross-border settlement but only during the pilot period. 

Tuesday’s edition of the regional newspaper Vedomosti reported Sergei Altukhov, a member of the economic policy committee of the Russian parliament, as saying that the government is also working on a bill that would create a national agency to license and regulate cryptocurrency platforms present in Russia. Altukhov pointed out that a new tax code will be established for miners as part of the rule.

On Monday, Nabiullina told a parliamentary faction of the “New People” political party that the central bank’s proposal involves the formation of separate organizations tasked with mining cryptocurrency and processing payments for cross-border commercial dealings. It’s unclear what these organizations are. BitRiver, one of Russia’s major mining businesses, previously collaborated with Gazpromneft, a state-owned oil corporation.

Digital assets created in Russia may be used for such cross-border transactions in accordance with local law adopted in 2020, according to Nabiullina. These assets would be comparable to global decentralized cryptocurrencies.

Alexey Guznov, Nabiullina’s deputy, added that the Bank of Russia and the government are presently discussing what kinds of organizations may take part in the experiment, what their business models should resemble, and whose banks they will be using. He predicted that government-sponsored businesses will likely be involved in the experiment’s initial stages.