Russia Aims to Bypass Western Sanctions with Crypto, Says Chainalysis

Blockchain analytics firm Chainalysis reports that the Central Bank of Russia (CBR) is spearheading efforts to incorporate cryptocurrency into the country's financial infrastructure, aiming to facilitate cross-border transactions and bypass Western sanctions.

New legislation enacted on August 8, which President Vladimir Putin has signed, now permits cryptocurrency mining and its use in international trade. Testing for crypto payments is set to start in September.

These legislative changes are part of Russia’s strategy to diminish reliance on the US dollar and explore alternative financial systems amid escalating geopolitical tensions. The CBR is also advancing its digital ruble, a central bank digital currency (CBDC) slated for a 2025 launch. Certified mining operations will be allowed to use digital currencies for international transactions.

Chainalysis highlighted that Russian cryptocurrency exchanges like Tetchange, 100btc, Bitzlato, Suex, and Garantex, based at the Moscow International Business Center, might be leveraged for these payment activities. Garantex, in particular, is noted for its substantial liquidity and could be significant under the new regulations.

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Additionally, Exved, linked with InDeFi Bank and co-founded by Sergey Mendeleev and media figure Alexander Lebedev, has reportedly been handling import and export transactions even before the legislation’s formal approval.

Despite the complexities introduced by Russia’s evolving crypto landscape, Chainalysis maintains that blockchain transparency will remain a key tool for monitoring these financial activities.

Alexander Stefanov