- Russia has legalised crypto mining in the latest move geared toward sanctions evasion and overtaking the US as the global crypto hub, says Chainalysis.
- Reports say that the country will launch Chinese yuan and Russian ruble-pegged stablecoins, which will be offered alongside existing options like USDC and USDT.
Russia’s legalizing of crypto for international payments is part of an attempt by the country to overtake the US as the global crypto hub, says New York-based blockchain analytics firm Chainalysis.
As we reported, Russia has changed its crypto tune and is now one of the most bullish nations globally. President Vladimir Putin’s government has approved crypto mining, approved crypto payments, and is now working on two national exchanges to facilitate easier settling of crypto trades.
“These recent crypto-forward legislative efforts are part of Russia’s broader efforts to develop alternative payment mechanisms to alleviate Western sanctions pressure while decreasing dependence on the U.S. dollar, which has been a long-term goal for Russia, especially amidst increasing geopolitical tensions,” says Chainalysis in a recent report focusing on Russia’s recent pro-crypto moves.
It comes as little surprise that Russia is exploring alternatives to global payment systems. After invading Ukraine, Russia became the most sanctioned nation globally, which has resulted in Russian businesses and individuals being isolated from Western-controlled systems, including the ubiquitous interbank messaging network SWIFT.
The country has been exploring a blockchain payments alternative as part of BRICS, but as we reported, this is still some way off as all the members have to harmonize their financial laws. On the other hand, crypto is ready to go and can be used as is, making it an attractive proposition for Russia.
Russia to Overtake US as Crypto Capital?
Chainalysis believes all these moves could also be led by President Putin’s desire to unseat the US as the crypto capital, stating:
Beyond bolstering the economy in wartime, Russia is positioning itself in an attempt to surpass the United States as the global leader in cryptocurrency mining.
The US has been the world’s crypto mining capital for a few years. However, it only rose to prominence because China purged all its miners after dominating the sector for over a decade. Miners fleeing China relocated to Kazakhstan, Russia, and later the US. In fact, Russia previously dominated the US in crypto mining, and according to Chainalysis, this could be Putin’s goal once again.
“Russia’s authorization and oversight of crypto mining suggests a strategic alignment with national interests, despite the ongoing international sanctions targeting Russia’s energy resources,” the company says.
However, if Trump wins the November polls, a lot could change. The Republican candidate has pledged to cement America’s position atop the crypto sector, promote mining, and establish a national Bitcoin reserve.
