Russia's President Vladimir Putin affirmed the potential of Bitcoin, saying the rise of the top cryptocurrency Putin represents an inevitable progress in technology.
For Russia, cryptocurrencies are more than just innovation; they are also a strategy to counter sanctions and reduce dependence on the dollar. "Who can ban Bitcoin? Nobody," Russian President Vladimir Putin was quoted as saying at the VTB Investment forum, according to local news agency Taas.
Putin's remarks highlighted his belief that digital currencies are a natural evolution in global finance. He reportedly said that these instruments will develop regardless of the dollar.
Evolution of Global Finance
According to the Russian president, the need to reduce costs and enhance reliability ensures the continued growth of Bitcoin and other electronic payment tools. This stance reflects a broader shift in Russian financial policy. The country has now embraced cryptocurrencies as a way to bypass restrictions imposed by Western countries.
BREAKING: ???????? Russian President Putin says "Who can ban #Bitcoin? Nobody." pic.twitter.com/6mJ664BZZ8
— Bitcoin Magazine (@BitcoinMagazine) December 4, 2024
Putin's administration recently signed laws recognizing digital currencies as property for foreign trade, exempting crypto mining from value-added tax (VAT), and establishing a clear regulatory framework.
Russia's legislative push into digital currencies aims to create a controlled but supportive environment for their use. In August, Putin also signed laws legalizing crypto mining and enabling the Central Bank to pilot cross-border transactions using cryptocurrency.
These moves aim to facilitate international trade, even with countries hesitant to defy Western sanctions. The tax framework is a key part of this initiative. Individuals earning less than 2.4 million rubles ($22,300) in cryptocurrency profits reportedly face a 13% tax in the country, while higher earners are taxed at 15%. Corporations engaging in crypto transactions will pay a 25% tax starting next year.
2022: Russia's central bank proposed banning #Bitcoin and crypto mining.2024: Putin signs law legalizing Bitcoin and crypto mining in Russia ???????? pic.twitter.com/Q2lPrUaU5W
— Bitcoin Magazine (@BitcoinMagazine) August 8, 2024
A Shift Away from the Dollar
Putin explicitly linked the rise of digital currencies to the declining global use of the US dollar, although he argued that this shift is driven by US policies rather than external forces. Cryptocurrency also offers Russia an alternative route to acquire restricted goods and bypass US influence over global financial systems.
With supportive legislation and economic strategy, Russia aims to strengthen its role in the cryptocurrency market. However, for Putin, the rise of Bitcoin and other digital currencies is important for Russia's financial independence.
In June, the Moscow Exchange paused trading in dollars and euros following the sanctions imposed by the US after Russia invaded Ukraine. This move suspended all exchange trading and settlement of deliverable instruments in US dollars and euros. The US mentioned that the measures were aimed at disrupting the financial mechanisms facilitating Russia's military supply chain.
This article was written by Jared Kirui at www.financemagnates.com.
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