SPIEF 2024: Russia signals shift in cryptocurrency policy

Russia is ready to support new ways of facilitating international payments, including cryptocurrencies, Deputy Finance Minister Ivan Chebeskov has said, signaling a potential shift in government policy. He also argued that global trust in the US dollar and the euro has eroded significantly.

Speaking on Thursday at a panel discussion devoted to industrial crypto mining on the sidelines of the St. Petersburg International Economic Forum (SPIEF), Chebeskov highlighted that businesses have begun to seek alternative ways to carry out cross-border payments.

“We always support tools and channels providing alternative ways of settlements… digital currencies are seen as one of them,” the minister said, while calling for a comprehensive approach to government regulation on the mining and use of cryptocurrencies.

Chebeskov stressed that the Finance Ministry, the Bank of Russia, the State Duma and law enforcement authorities are working on creating legal frameworks for cryptocurrency payments. A draft bill for regulating cryptocurrency exports is also being developed, the deputy minister said, adding that its final version would depend on the legislation adopted by the government.

In December, the ministry suggested considering the idea of granting rights to crypto miners to export the currency as a commodity. At the time, Chebeskov compared the idea to exports of natural gas.

The latest statement signals a U-turn from the ministry’s previous stance on virtual currencies. As cryptocurrencies gained global popularity, Russian lawmakers initially raised concerns that the use of alternatives to fiat money could involve citizens and entities in illegal activities, including the laundering of criminal proceeds. In 2016, the ministry proposed penalties of up to seven years’ imprisonment for trading and mining activities.

The global trend towards de-dollarization has intensified since Russia was cut off from the Western financial system after the outbreak of the Ukraine conflict in February 2022. At the same time, financial analysts and several Western officials have raised concerns that the freezing of Russia’s foreign assets and widely debated plans to confiscate them outright could further spur the trend.

Earlier this month, Russian President Vladimir Putin accused the US authorities of using the greenback as a “tool of combat,” which he argued is undermining global confidence in the dollar. Putin also said Moscow has never sought the “de-dollarization” of the national or international economy, but claimed that the process is “inevitable.”

The trend has been increasingly supported by members of the BRICS economic group, which have shifted towards the use of national currencies instead of using the dollar and euro in internal settlements. Earlier this year, Yury Ushakov, a senior foreign policy aide to the Russian president, said the group was planning to create a payment system based on blockchain technologies.

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