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Russian lawmakers passed a bill that will allow businesses to use digital assets in international trade as part of the pariah nation’s ongoing efforts to evade global sanctions after its illegal invasion of Ukraine. The law is expected to take effect in September, and the first digital asset transactions could take place before the end of the year, according to a Reuters report. Russia’s economy has been under significant strain since its February 2022 invasion of Ukraine, and the resulting war that rages on. The international community quickly condemned Russia’s actions and began imposing sanctions almost immediately, with gusto. One of the most severe measures was barring major Russian banks—including Bank Otkritie, Novikombank, Promsvyazbank, Rossiya Bank, Sovcombank, VEB and VTB—from the international financial messaging system Society for Worldwide Interbank Financial Telecommunication (SWIFT). The unprecedented penalty of being removed from SWIFT delayed payments to Russia for its oil and gas exports, hampered Russian banks and forced the country to explore alternative money transfer options. For this reason, it didn’t take long for Russia to turn to a digital asset space already rife with illicit finance, in large part due to its decentralized—to an extent—and pseudonymous nature, making it a popular money transfer option for terrorist financing, money launderers and, in Russia’s case, rogue nations. Several firms have already been fined for helping Russian banks use digital assets. In June, Lithuania penalized digital asset firm Payeer €9.3 million ($10.1 million) for Russia-related sanction violations, specifically, allowing Russian customers to transfer money to EU-sanctioned Russian banks. Anatoly Aksakov, head of the Duma’s financial market committee, told Bloomberg that under the new bill, digital assets would be held to the same set of regulations as foreign currencies—such as the U.S. Dollar (USD)—in Russia. Russian lawmakers have been vocal about the need for creative solutions to its payment issues. Elvira Nabiullina,…

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Filed under: News - @ August 1, 2024 11:24 am