Russian President Vladimir Putin has signed legislation aimed at reducing the country's dependence on the United States dollar in international trade.

The law, set to take effect in November 2024, will allow approved mining companies to register through a state database to mine cryptocurrencies.

Individual, small-scale miners can also mine digital currency without formal registration, provided their energy consumption stays below a specified threshold.

The oversight of the newly legalized mining industry will be shared among the Bank of Russia, the Ministry of Finance, and selected cabinet ministers within the Russian government.

These authorities will define more detailed regulatory requirements in the coming months.

Additionally, the legislation introduces a ban on mass cryptocurrency advertising within Russia.

The BRICS group—comprising Brazil, Russia, India, China, and South Africa—is a coalition of emerging economies increasingly seeking to reduce their reliance on the US dollar for international trade.

The concept of an alternative digital currency was first introduced by BRICS at the 11th annual BRICS Summit in 2019.

This proposal has since attracted significant attention, though it faces considerable challenges, including disagreements among key member states on the implementation of a unified currency.

In 2023, Russia renewed its efforts to develop a unified BRICS currency.

State Duma Deputy Chairman Alexander Babakov reportedly stated that the leading members of the economic bloc were working on creating a new currency for international trade settlement.

Following Babakov's comments, the Bank of Russia and the Russian government revealed plans to establish special entities for using digital assets in cross-border settlements.

Macroeconomist Lyn Alden expressed skepticism about the potential for a unified BRICS currency backed by gold to replace the US dollar.

In a statement to Cointelegraph, Alden highlighted a long-standing issue with gold-backed paper currencies: the tendency to issue far more paper, or claims on the underlying gold, than the actual gold reserves.

This could lead to monetary debasement and, ultimately, the collapse of the currency.

Sources:

https://cointelegraph.com/news/russia-legalizes-bitcoin-cryptocurrency-mining

https://x.com/ki_young_ju/status/1821573268433711342?t=XtFdnHXjeGij14UkIMHFtA&s=19

https://x.com/APompliano/status/1648828585778507777