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Bitcoin in Russia could become legal tender

Guzmán Leal
7 min read
Bitcoin in Russia could become legal tender – Cryptocurrencies – WebMediums
The conflict with Ukraine could be one of the reasons.

While the Russia-Ukraine conflict is heating up, official information has emerged from the Russian government regarding cryptocurrencies.

In principle, the intention would be to regulate any activity that involves digital currencies. Therefore, it would be a gateway for Bitcoin to be adopted as legal tender in the country. Read on to learn more about it.

Bitcoin in Russia could be adopted soon, what is known about it?

According to official information , both the government and the central bank of Russia have reached an agreement regarding the acceptance of cryptocurrencies.

For now, it remains only as a bill, which is expected to be officially announced on February 18. Within it, they would define cryptoassets as "currency analogs", as well as the ruble.

In this way, cryptocurrencies would be tied to the laws that regulate traditional money, in addition to some more that would be added. In this regard, in the official announcement through a close translation, they mention that:

"The objective of the standard is to integrate the circulation mechanism of digital currencies into the financial system and ensure control of cash flows in the circuit of credit institutions."

In a nutshell, to be able to transact with cryptocurrencies, you will have to do it through the legal sector through authorizations. That is, having an identification within the banking system, or through platforms that have previously been authorized by the government.

What remains intact is Bitcoin mining, which would remain under normal conditions. It is an activity for which Vladimir Putin himself has shown his support and encouraged its progress.

Aspects to consider to operate with BTC in Russia

Nowadays, there is a lot of progress that crypto assets have had in the world, as well as the great receptivity of people. This has caused a large number of platforms to be developed for transactions between cryptos.

In particular, the advantage of such means is that they do not request any type of personal data from the user. Therefore, the identity of the same is kept in total privacy, as well as all the transactional movements that it carries out.

Bitcoin in Russia could become legal tender – Cryptocurrencies – WebMediums
Russia plans to use cryptocurrencies as legal currency.

However, with the project that Russia is preparing in terms of laws, all of the latter could not be possible on its territory. Everything, in the event that it is approved.

It means that anyone who wants to operate with cryptocurrencies must be registered in the national banking system. In this way, the Russian government will be able to access your personal information, including the movements you make in crypto assets.

Said system would be known as a "Transparent Blockchain", designed with the aim of regulating any money operation carried out, also including the ruble.

Possible sanctions for those who do not follow the law

What allows digital currencies to be recognized by the Russian government as an “analogue of currencies”, is that it is regulated in a traditional way. That is to say, that it be treated like any other currency, which for this specific case would be the ruble.

One of the main details that the project shows that must be considered is the declaration of funds.

Indeed, for any crypto that you own, if it has a translated value greater than or equal to 600,000 rubles, equivalent to 8,000 dollars, you must give reason. Otherwise, it may be considered as a suspicious and illicit activity, having sufficient reason for investigation and sanction.

Likewise, for those users who do not follow the regular roads, authorized by the government itself, they will be subject to a fine. That is, through banking systems or previously licensed p2p platforms.

The story of Bitcoin and Russia seems to reach a tipping point

At first glance, this is news that surprises more than one. Above all, taking into account the different statements of the central bank regarding the use of cryptocurrencies.

In different communications, they pointed out the financial risks involved in the use of BTC and other digital currencies as a financial resource. Even in January, the Bank of Russia requested a total ban on cryptocurrencies throughout the country, due to their speculative origin.

Bitcoin in Russia could become legal tender – Cryptocurrencies – WebMediums
The Russian Central Bank sought to ban any crypto-related activity.

However, the statements did not sit well with all sectors of the country, led by the Russian Ministry of Finance. Given this, they pointed out that instead of prohibiting them, they should propose a regulation system for them. And it seems that it has already arrived.

In addition, they pointed out that the total ban on cryptos would mean a delay for Russia in terms of technology. This, taking into account that a large number of people adopt and use digital currencies as an economic resource.

But then, what would be the reason for this surprise?

At this point, this is where everything related to the current problem that exists between Russia and Ukraine, with a live threat of a Russian invasion, comes in.

And it is that, in the event of an eventual Russian invasion of Ukraine, the entire West would have prepared a huge list of sanctions.

Among them, the most significant would be to remove the Russian country from the SWIFT banking data system, being a death blow to the nation's financial system.

But what is SWIFT? They are the bases where the entire global financial system is based, being made up of more than 11,000 banks from 200 countries. In essence, it is the one that allows transfers between each one.

To understand the impact that this sanction would have, we must go back to 2012. It was the year during which SWIFT eliminated any type of relationship or activity with more than thirty banks in the country of Iran.

At the time, it was a response to mounting sanctions from the European Union, as well as constant pressure from the United States. All this resulted in the country's financial system being left in ruins, promoting the total decline of the country and its subsequent fall.

Therefore, faced with the growing threat of sanctions, and there will be, the Kremlin is already looking for alternatives. One of the main options would be nothing more and nothing less than Bitcoin.

Bitcoin in Russia could become legal tender – Cryptocurrencies – WebMediums
The adoption of Bitcoin as an analog currency would be a strategy to evade sanctions.

Also, on the other hand, it would mean becoming the first world power to adopt cryptocurrencies as legal tender.

Russia Ukraine, what role does Bitcoin play?

The current conflict between Russia and Ukraine seems to be felt throughout the world, given the growing threat of a new world war.

Within all this, there seems to be a new protagonist, and who else if not Bitcoin. Coming to the point, under recent investigations by Elliptic, BTC was discovered as a bargaining chip between Ukrainian advocacy groups and non-governmental organizations.

Under the term of donations, the different rebel groups would have received money translated into BTC, in order to obtain financing for their activities.

According to the report, there is talk of an estimated donation using cryptocurrencies of approximately USD 570,000. However, it only represents a small percentage of what has actually been received between the two groups.

Bitcoin in Russia could become legal tender – Cryptocurrencies – WebMediums
Ukrainian rebel groups would be using Bitcoin as a currency of exchange. By CryptoNews.

It should be noted that payments in the form of donations increased by up to 900% in 2021, the main reason for which was the Ukrainian conflicts.

The reason for the use of Bitcoin is easy to see, since a blocking of funds is very difficult to happen. In this way, they can use the money for any purpose within their ideals of freedom.