On July 23, Russia’s parliament will review legislation on whether to permit crypto payments for international transactions, in light of ongoing sanctions imposed by the West. The move would be dramatic since Russia currently outlaws crypto for payments domestically, but has not outright banned crypto in the country.
“This is a need for businesses, especially in cases involving sanction mechanisms, when they need to enter the international market, and it can’t always be resolved through standard methods,” the head of Russia’s money laundering watchdog, Yuri Chekhanchin, said.
Russia’s decision will not be unprecedented, as other internationally-sanctioned countries like Venezuela have also used cryptocurrency for international payments. Russia’s trade relationships with China, India, the United Arab Emirates, and Turkey have increased the push to increasingly look for alternative payment methods, though the U.S. has not been shy about going after companies that engage in sanctions evasion through cryptocurrencies.
In fact, the U.S. is closely monitoring Russia’s usage of crypto to sidestep sanctions, with U.S. Treasury Secretary Janet Yellen recently testifying in front of the House Financial Services Committee: “We are very attentive to the [Russian] use of cryptocurrencies and stablecoins. We don’t think it’s a very substantial thing that Russia is doing but as our sanctions bite more and more, it becomes a concern.”
Congressman Brad Sherman, a Democrat from California, also testified at the hearing that stablecoins and other cryptocurrencies were primarily being used for sanctions evasion by Russia, not for earning interest or capital gains: “The Russian central bank has urged the use of crypto to evade Western sanctions,” he said. “A stablecoin offers no particular advantage in that it’s stable, you can’t make money by holding it, and it usually doesn’t pay interest — certainly not the interest you get on money market funds. Its sole advantage is evading our sanctions and other laws, including tax laws, and I hope that in enforcing our sanctions on Russia, you will not facilitate that by facilitating stablecoin,” he told Yellen.
Inside Russia, President Vladimir Putin has expressed criticism of the bitcoin mining industry, castigating its high energy footprint. According to Russia’s Energy Ministry, every year mining eats up nearly 1.5% of the country’s total energy use, amounting to an average of 16 billion kilowatt-hours annually.
“The figure continues to go up,” Putin said this month. He underlined that Russia’s relatively inexpensive energy costs made it easy for bitcoin miners to operate. Russia is the top country in the world for crypto mining after the United States. While mining occurs across Russia, one key mining area is Dagestan, a North Caucasus republic that faces regular electricity shutdowns thanks to poor infrastructure.
Source:- finance.yahoo
