Russia mandates that all domestic transactions occur in rubles, categorizes Bitcoin solely as an investment, while exploring cryptocurrency for international trade and launching a digital ruble CBDC.
Summary
- In accordance with a 2020 law and recent comments from MP Anatoly Aksakov, Russia prohibits the use of Bitcoin and alternative cryptocurrencies for purchasing goods and services, enforcing payments solely in rubles.
- Authorities permit limited cryptocurrency usage for cross-border transactions under experimental frameworks as Russia seeks alternatives to SWIFT and Western-led payment systems.
- The Bank of Russia is testing a digital ruble CBDC alongside cash and non-cash rubles, with the goal of enhancing control, traceability, and resistance to sanctions in trade flows.
Russia has officially outlawed the use of Bitcoin and other cryptocurrencies as legal tender, mandating that all domestic transactions be carried out strictly in rubles, as per government policy announcements.
Russian legislators and the central bank regard cryptocurrencies strictly as investment assets that can be held, traded, or speculated upon, but not utilized for payments, according to official statements. This restriction is based on a 2020 digital assets legislation, which clearly prohibits crypto-based domestic transactions and imposes penalties for breaches.
Russia and Bitcoin face international challenges
The Bank of Russia continues to oppose the use of private cryptocurrencies as a payment means. Officials assert that these assets pose significant risks, lack government guarantees, and jeopardize monetary integrity, as indicated in public statements from the central bank.
Notwithstanding the domestic ban, Russia has authorized the use of cryptocurrency for cross-border settlements under an experimental legal framework, as announced by authorities. This policy shift follows sanctions and limited access to international payment systems like SWIFT, which have constrained Russia’s access to conventional financial infrastructure.
The cross-border cryptocurrency authorization enables businesses to transact beyond Western-centric payment channels for global trade, as stated by government officials.
Additionally, Russia is progressing with a digital ruble pilot initiative, reported by the central bank. The central bank digital currency aims to enhance monitoring, traceability, and efficiency in transactions, functioning alongside cash and non-cash rubles rather than replacing them, according to the Bank of Russia.
These policies illustrate Russia’s strategy of rejecting decentralized cryptocurrencies for domestic purposes while allowing their use for international transactions that align with state interests, and simultaneously working on a state-controlled digital currency alternative, as per analysts observing Russian monetary policy.
