MOSCOW: Russian lawmakers passed a bill on Tuesday that will allow businesses to use crypto currencies in international trade, as part of efforts to skirt Western sanctions imposed after Russia’s invasion of Ukraine.

The law is expected to go into force in September, and Russian central bank Governor Elvira Nabiullina, one of the backers of the new law, said the first transactions in cryptocurrencies will take place before the end of the year.

Russia has faced significant delays in international payments with major trading partners such as China, India and the United Arab Emirates after banks in those countries, under pressure from Western regulators, became more cautious.

“We are taking a historic decision in the financial sphere,” the head of the Duma lower house of parliament, Anatoly Aksakov, told lawmakers.

Under the new law, the central bank will create a new “experimental” infrastructure for cryptocurrency payments. Details of the infrastructure have yet to be announced.

The law is part of a package that also includes regulations on the mining of cryptocurrencies and the circulation of other digital assets. The new law will not lift an existing ban on cryptocurrency payments inside Russia.

The central bank said that delays in payments have become a major challenge for the Russian economy, leading to an 8 per cent decline in Russian imports in the second quarter of 2024.

Published in Dawn, July 31st, 2024