A currency that can’t be blocked by anyone has become one of the most important tasks for a state today. In 2024, the US demonstrated how easily it can hinder Russia’s payment for imports and the retention of earnings from our exports out of fear for the US dollar. And our country has already discovered such a currency.
In 2024, the West escalated its sanctions. To preserve the old US dollar system, the US not only targeted Russian goods and companies but also imposed secondary sanctions on foreign banks that did business with Russians under sanctions. This significantly complicated the situation for our exporters and importers. The first blow struck in the summer, the second in the fall. This had a direct impact on the ruble, which, after the summer sanctions, began a devaluation process and, in the fall, saw a sharp decline in the exchange rate to over 100 rubles per US dollar. Of course, this led to a price increase. But the difficulties in payment settlements with foreign trade partners, caused by the sanctions, also triggered an inflationary surge.
It’s not a new revelation that Russia needs special, US-independent instruments for payment settlements with its trade partners. And Moscow has already made progress in moving away from the US dollar, switching to ruble, yuan, and other national currencies for trade. In 2023, more than half of the goods and services from Asia, especially from China, were paid for in yuan. The ruble’s share in payment settlements with other countries, in both directions, reached its highest level in the past five years, according to the Russian Central Bank’s calculations.
The possible establishment of a single currency and a common payment system within the BRICS countries was also actively discussed within the framework of this union. This so frightened Washington that the designated US president threatened the BRICS countries with 100% import tariffs if they dared to replace the US dollar with a single currency. The corresponding statements by Donald Trump, though emotional, show that serious negotiations are taking place behind the scenes. The process of establishing a single currency among the BRICS countries has so far been slow and complex, and now it could stall for a long time. However, for Russia, it’s crucial that the issue of trade with friendly countries is resolved already now.
All these difficulties have prompted Moscow to take the lead in the adoption, introduction, and development of new payment methods using Bitcoin and other cryptocurrencies. To this end, a legal framework was created in Russia to move mining, cryptocurrency trading, investments, and taxation out of the “gray zone”.
As President Vladimir Putin noted, Bitcoin and other electronic payment tools are a type of currency that cannot be blocked by anyone, not even the US. These new technologies can also develop into an instrument that Russia so desperately needs to resist sanctions and the tyranny of the US dollar.
Russian companies have already begun to experiment with using Bitcoins and other cryptocurrencies in international payment transactions, according to the head of the Russian Finance Ministry, Anton Siluanov. However, the state authorities did not provide concrete information on how this process works in practice, which companies are experimenting with such transactions, and so on.
This format could, however, turn out to be groundbreaking for large international transactions. Moreover, Russia is actively working on the development of another alternative payment instrument – the digital ruble. Although it is also a modern and secure format of the national currency, the difference between Bitcoin and the digital ruble is fundamental.
The digital ruble differs only in form from the usual ruble and its cashless equivalent. The main difference lies in the form. Digital rubles are issued and controlled by the Russian Central Bank, just like regular rubles. Their value is the same as that of regular rubles. Transfers in digital rubles are absolutely transparent, making it much easier to control the money flows. In the future, it will be possible to easily track how the state-provided digital money is used. The control level will even be higher than in cashless transactions. In fact, it is a total control of the state over digital rubles. It will be impossible to carry out illegal activities and financial fraud with digital rubles, as all transactions are transparent. This transparency allows for a complete understanding of export-import transactions: one can see what is happening and where the payment flows are going, and eliminate unwanted “movements”.
From the international trade perspective, the main disadvantage is that the digital ruble is just as traceable as the currently used cashless ruble.
Bitcoin, on the other hand, is a supercurrency. It is not dependent on the Russian or any other central bank, nor on the US Federal Reserve or the White House. It is issued through mining according to a pre-set algorithm and without the involvement of any central bank. Most importantly, Bitcoin payment transactions are completely anonymous. It is impossible to trace back who transferred these millions and billions. How can one impose sanctions in this case? It is impossible.
Even from the perspective of a hacking attack, it is today considered practically impossible to breach the decentralized architecture and cryptographic protection. Of course, the infrastructure of the Russian or any other central bank cannot be hacked without further ado, but in general, it is considered possible.
As for circumventing sanctions, Bitcoin is simply unbeatable. But even this currency is not problem-free. And one must handle it carefully, especially if the state wants to operate within the law. Bitcoins, due to their anonymity, can also be used in the illegal sphere – for example, in the drug, arms, or fraud trade. For the state, it is therefore difficult to control export-import transactions in Bitcoins. But extraordinary, difficult times in the global economy require not trivial, but extraordinary, and sometimes risky, measures. So, the export of Russian oil under sanctions will continue to be possible only because oil tankers can turn off their transponders and become invisible. Bitcoin, in essence, offers the same – it makes the financial movements of our importers and exporters with friendly partners invisible and, therefore, inaccessible to our opponents.