Russian companies adopt Bitcoin for global trade amid Western sanctions

Russian Finance Minister Anton Siluanov revealed on Wednesday that domestic companies are now using Bitcoin and other digital assets for international payments, enabled by recent legislative tweaks designed to offset Western sanctions.

It is important to note that these sanctions have posed challenges to Russia’s trade with important partners such as China and Turkey, as local banks take a cautious approach to avoid regulatory backlash from the West.

In a statement to Russia 24 television channel, Siluanov said:

“As part of the experimental regime, it is possible to use bitcoins, which we had mined here in Russia (in foreign trade transactions). These transactions are already taking place. We believe that they should be further expanded and developed. I am sure that this will happen next year.”

Putin backs Bitcoin as an alternative

President Vladimir Putin said earlier this month that the US administration’s use of the dollar as political leverage is diminishing its role as the world’s reserve currency. This, in turn, has prompted many countries to explore alternative assets. Highlighting Bitcoin as a prime example, he noted its resistance to regulation on a global scale. These remarks essentially suggested Putin’s endorsement of the growing use of cryptocurrencies.

Bitcoin’s price surge above $100,000 fueled global excitement this month, with Russia seeing an 8% increase in crypto exchange web traffic, as recently reported by MegaFon. Regulatory changes and global trends have also contributed to this growth. MegaFon’s research further observed an 8% to 10% monthly increase in visits to the world’s top 20 exchanges, with Russian users accounting for 27% to 30% of total traffic.

Expansion, repression and extended winter bans

This year, Russia authorized the use of cryptocurrency in foreign trade and has stepped up efforts to legalize mining activities with the aim of consolidating its position as one of the world’s leading Bitcoin mining countries.

Russian authorities also stepped up their crackdown on illegal cryptomining, the latest focusing on the Irkutsk region. The Irkutsk Electric Grid Company, in cooperation with law enforcement, shut down an unregistered operation using more than 200 ASIC equipment, consuming 600,000 kWh per month, equivalent to 80-100 homes. Although it was registered as a company, it reportedly failed to meet the cryptomining registration requirements.

This comes after Russia extended its winter ban on crypto mining until 2031, which would target regions such as Dagestan, Chechnya and Siberia. From January 2025, the ban affects mining during peak energy seasons. Cryptomining, which consumes 1.5% of national energy, has caused imbalances in payments for electricity and grid voltage.

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