Putin: Crypto Is Increasingly Being Used for International Settlements

Russian President Vladimir Putin says crypto is finding a place in the international settlements sector – both in Russia and beyond.

His government, meanwhile, is pressing for legal reform that would allow Russian firms to do crypto-powered business.

Per TASS, Putin said that “cryptocurrencies are increasingly used” throughout the world “as a means of payment in international settlements.”

Putin: Crypto Is Not Money

The Russian President added that “cryptocurrencies are not monetary units in the traditional sense.”

At a meeting of top economic policymakers, he said that he had “already given instructions to regulate [crypto] mining in Russia.”

However, many believe that Moscow will bundle a wide range of crypto-related matters in a new regulatory bill.

This bill, some politicians say, could be approved in the coming weeks and may come into force as early as September 1.

Vladimir Putin backs a Russian government proposal to tax and regulate mining of cryptocurrencies, rejecting the central bank’s proposal to ban it completely https://t.co/vHFbI0BgAJ

— Bloomberg (@business) January 28, 2022

Cross-border Crypto Pay Set for Moscow OK?

The draft law looks increasingly likely to contain clauses pertaining to the use of crypto in the cross-border payments space.

Interfax reported on July 17 that the Ministry of Finance wants to “allow” certain individuals and groups to “trade and exchange cryptocurrency” “within the framework” of an “experimental legal regime (ELR).”

The ELR looks set to become a sandbox that will operate under the control of the Central Bank.

Russian firms selling to China are finding it increasingly harder to get paid after the US widened sanctions. https://t.co/WGfhkYnIGx

— Bloomberg (@business) July 17, 2024

Top Russian media outlets have reported that Moscow “plans” to open the ELR “from September 1” for companies making crypto settlements in the foreign trade space.

The ministry and the Central Bank have been discussing the issue of using crypto as an “experimental” sanctions-fighting measure for several months.

However, Moscow is aware that many Russian companies are not waiting for a green light from the government.

With Russian banks frozen out of networks like SWIFT, some companies started trading with international partners using crypto as a payment tool last year.

But this appears to have stirred concern for some. Yuri Chikhanchin, the Head of the anti-money laundering agency Rosfinmonitoring, this week called for “caution” when rolling out crypto regulation.

Agency Wants Power to Block Crypto Transactions

Chekhanchin agreed that Moscow needed to “accelerate the launch” of “infrastructure for payments in cryptocurrencies.”

However, he claimed that lawmakers needed to “carefully assess associated risks.” And he demanded that Rosfinmonitoring be given new powers to block crypto transactions in certain cases. Chekhanchin said:

“Businesses, particularly those navigating sanctions, need to participate in the international market. But that cannot always be done using conventional methods.”

Interfax said that lawmakers will debate two crypto-related bills on Tuesday next week. These bills will also likely tackle issues pertaining to crypto mining and the advertising of crypto-related services in Russia.

Putin also indicated a willingness to back a bid to legalize industrial crypto mining in Russia.

However, the Russian President issued many words of caution on the matter, suggesting that power providers and local governors may be given the power to ban mining in certain areas.

He quoted government ministries as saying that mining now accounts for 1.5% of Russian power usage. Putin said:

“Uncontrolled growth in electricity consumption for cryptocurrency mining can lead to power shortages in certain regions. Cases of [shortages] have been reported in the Irkutsk Oblast, Buryatia, and the Transbaikal region.”