Russian Arms Producers Uses Bitcoin to Circumvent Sanctions

Jul 28, 2019 at 10:25 // News
Author
Coin Idol
They believe this will enable them doge the US and other existing international sanctions.

The Russian arms producer, Soyuzmash, seeks to bypass US sanctions using cryptocurrency. The Union of Machine Builders recently requested permission from the Central Bank of Russia to allow it accept payments in Bitcoin for all its activities related to weapons. They believe this will enable them doge the US and other existing international sanctions. Russia is the world’s second main exporter of arms, commanding 21% of the global market, following the US with around 36%.

While discussing with the military advisory board, the Vice President of Soyuzmash known as Vladimir Gutenev, admitted that the circumstances are hard-hitting. Some payments being made for the delivered weapons used to take weeks, months, etc., and it has been hard to carry out these particular transactions.

The State Duma Defense Commission has come out to support Soyuzmash about its efforts and interests towards digital asset payments, claiming that the initiative will help relieve some of the major issues. Since cryptocurrency transactions are secret, transparent, secure and fast, they could be one of the solutions to resolving prevailing issues.

Bitcoin is Not Yet Legal in Russia

However, the problem that Soyuzmash faces is that the Central Bank of Russia is clear on the use of cryptocurrencies including Bitcoin. The Bank does not wish to legalize cryptocurrency. This will be very hard for the weapon producer to achieve its set targets.

Among the reasons why many financial authorities have not legalized Bitcoin, is its purported use for acquiring illicit products and services on the dark web such as narcotics, sex, etc. Bitcoin (BTC) has allegedly been used to perform other malevolent operations including terrorism financing, money laundering and others. Therefore, the illegitimacy of BTC in Russia stopping state-backed firms making decently moot arms and weapons deals appears rather tongue-in-cheek.

According to a recent report, it is not just Russia that is trying to circumvent international sanctions, other states including China, Zimbabwe, Iran, Venezuela, Sudan, etc. are busy looking for means of dodging the high economic pressure on them, and this could be through Bitcoin.