Russia, a member of the BRICS, is preparing to use cryptocurrency for its commercial transactions in a global context of geopolitical tensions and economic sanctions. This decision could disrupt the international trading landscape by offering Russia an alternative to US dollar-dominated financial systems.
A Strategic Response to Sanctions
Since the US imposed sanctions in response to the invasion of Ukraine, Russia has been looking for ways to circumvent these restrictions. The use of cryptocurrency for trade settlements is a key strategy to mitigate the effects of sanctions and facilitate trade with other countries. Starting September 1, 2024, Russia will launch tests on cryptocurrency exchanges and digital tokens for cross-border transactions, marking a turning point in its economic policy. Finance Minister Anton Siluanov announced that Russia will set up two new state-run cryptocurrency exchanges, which will allow accepting and sending cryptocurrencies with other BRICS members and trading partners.
The BRICS in Quest of De-dollarisation
The BRICS alliance, which includes Brazil, Russia, India, China and South Africa, aims to reduce the dominance of the US dollar in international trade. The adoption of cryptocurrency by Russia is part of this de-dollarization process, which aims to establish alternative payment systems and strengthen member countries’ economies. By integrating cryptocurrency into their transactions, the BRICS hope to create a more resilient trading network less vulnerable to dollar fluctuations.
