Russia's Finance Minister Reveals International Trade Transactions Completed with Mined Bitcoin Following Legalization of Bitcoin Payments
In July 2024, Russia introduced legislation related to cryptocurrencies, including the legalization of mining operations within its borders. These operations must be registered and taxed, and the legislation permits international trade transactions to be conducted using Bitcoin.
The Russian Finance Minister, Anton Siluanov, disclosed that the country has already completed international trade transactions using Bitcoin mined within Russia. However, the specific trading partners involved have not been disclosed.
According to Russian legislation on Bitcoin, businesses are permitted to use Bitcoin for payment of goods, but only for international trade. For example, a Russian company purchasing products from a foreign company can negotiate payment in Bitcoin.
This approach has been adopted primarily because Russian businesses currently face sanctions from the West, making it difficult for banks in most countries or regions to accept payments from Russian enterprises, to avoid regulatory scrutiny for violation of rules.
Bitcoin's semi-anonymity offers an alternative to traditional banking transactions, despite the complexity involved in such transactions (for instance, cross-border businesses need to find ways to liquidate Bitcoin). Nonetheless, this remains one of the few options available to Russia.
The legislation facilitates individuals and businesses within Russia to utilize resources like electricity for mining. The mined Bitcoin can then be traded to domestic businesses in need, who can use it to make payments to foreign enterprises.
Bitcoin has thus become a relatively good medium for Russia to complete payments without requiring foreign businesses to accept Rubles or other currencies that might subject them to banking scrutiny.
For domestic transactions within Russia, however, the legal currency, the Russian Ruble, must still be used, and Bitcoin payments are not permitted.