The Kremlin's position on Bitcoin and cryptocurrencies has never been very clear. That's the least we can say! Russia has constantly oscillated between allowing, banning altogether, or even banning mining only.

The Ministry of Finance and the National Bank of the Russian Federation would have this time, according to the Russian news agency Interfax, found an agreement to allow the use of Bitcoin and cryptocurrencies in commercial exchanges outside its borders. Putin's Russia, which until now imposed strict regulations on these decentralized assets, is changing its policy to circumvent international economic sanctions following its invasion of Ukraine initiated in late February 2022.

The most surprising thing about this announcement is that it did not happen earlier. Indeed, Russia is one of the most advanced countries in cryptocurrencies. The University of Cambridge estimated that the country had the 5th highest Hash Rate on the Bitcoin Blockchain and that its population was one of the highest users of cryptos in the world.

Yet, despite its population's affinity for decentralized currencies and other crypto assets, the Russian government has, at every opportunity, taken stricter measures to limit their use. In January 2021, and again in July 2022, the Russian Parliament passed two laws prohibiting the use of coins and NFTs as a means of payment. However, they were still allowed as speculative assets.

But the consequences of the war that Putin's troops are waging in Ukraine should, at least in part, move the lines to allow the Russian economy to bypass some of the Western sanctions.

Russia wants to profit from Bitcoin and cryptocurrencies, but not allow the people to do the same

Kommersant, a Russian economic newspaper, published on September 22, 2022, a statement by Alexei Moiseev, the Russian Minister of Finance. He explains that he has agreed with the Russian central bank on the principle of cross-border payments in cryptocurrencies. This is not a 180-degree turn on the part of the Russian government, which continues to strictly control these digital currencies within its borders.

Moiseev justifies this policy change by explaining that until now, Russian laws on the matter did not prevent citizens of the country from opening wallets, but they did so abroad. This new regulation should therefore encourage them to repatriate their assets to Russia ... but under the control of institutions such as the central bank.

This last point is justified, as is often the case, by the necessary anti-corruption fight that the country is conducting.

While it remains to be seen to what extent this change in the country's legislation will allow it to circumvent economic sanctions, the fact remains that this objective is much more credible than the officially announced fight against corruption.

However, I can't see Russian citizens taking the risk of repatriating their Bitcoin and crypto assets through the Central Bank of Russia. It would be a huge risk in terms of censorship, while Bitcoin is precisely a unit of wealth independent of the control of the Russian authorities for them.

On the other hand, Putin wants to give himself an additional possibility for payments, for example for oil deliveries, if Russia is cut off from the current monetary and financial system, which is under American domination.

In short, like all dictators, whether in Iran or North Korea, Putin wants to take advantage of the benefits of Bitcoin, without giving his people the opportunity to do the same. This will not surprise you!

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