International crypto news comes with far bigger implications than other financial news. Indeed, investors in the U.S. might not care about news hitting the Moscow Exchange, but they sure do care when the country outlaws cryptocurrency. That’s because crypto is a global financial system; it benefits most when more countries around the world accept it. And thus more people can join the market. But, there’s some news that has even bigger implications. Today’s Russia crypto news shows just how that may be.
To say Russia’s relationship with crypto has been turbulent would be a massive understatement. In fact, just months ago, it outright banned its citizens from paying with digital assets. The ban was propelled largely by the Bank of Russia, an entity that has been vocally opposed to any sort of crypto accommodations. President Vladimir Putin, who signed the ban into law, has been less decided on his stance. Previously, Putin had been a fan of the country embracing crypto mining. With its excess reserves of energy, Russia could put this energy to use in mining crypto for profit.
But even after the Bank of Russia had won and saw crypto payments banished, the conversation has apparently never died among lawmakers. Yesterday, the Bank of Russia agreed to help legalize crypto payments, backtracking on its previous sentiments.
The flip-flop happened over just a handful of weeks, and the whiplash might have investors confused. But, rest assured, there’s a very “good” reason, for the country to backtrack on its ban.
As with most things involving the Russian economy lately, it all goes back to sanctions. This means that the news is rekindling a fear that many crypto investors held at the beginning of the year.
Russia Crypto News: Bank of Russia Flip-Flop Opens the Door for Sanction Evasion
This Russia crypto news this week has major implications for its foreign relations. The re-legalization of crypto payments will open the doors for a country facing some of the hardest global economic sanctions in the world right now.
To be clear, the ban on crypto payments has not yet been lifted. However, the finance ministry of Russia — an institution bullish on crypto — has gotten the Bank of Russia to flip its stance in favor of cross-border crypto payments. It still remains hesitant to unban domestic payments.
Recent news out of Iran shows exactly why the Russian central bank is making this decision. Iran recently legalized crypto payments on imports. As a nation hampered massively by U.S. sanctions, the new law is bringing millions of dollars worth of imports into the country for the first time in decades.
When this news came, Russian Prime Minister Mikhail Mishustin suddenly became vocally in favor of using cross-border crypto payments for goods. Much like Iran, Russia has become the target of a number of sanctions from around the world over its invasion of Ukraine.
When the sanctions were first levied at Russia, many people were concerned that it would use crypto to subvert them. This theory fell unpopular among crypto advocates. They claim Russia could not conduct any sanction evasion through crypto on a notable scale. Moreover, the country’s decision to ban payments seemingly put these fears to rest for a time.
However, now, the possibility is back on the table, and it’s a bit more realistic than before. Iran is demonstrating that crypto is a useful tool to get around economic punishments, and Russia is obviously taking notes. The world will need to keep an eye on the country to see whether it really does roll back its ban. After that, the sanctions conversation will most certainly be back on the table.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
