This will delay but not stop the "circular economy" from gaining traction in Russia. It will, however, push the existing activity "underground" and off the radar of the government. Quite a number of those in Russia accept bitcoin as a payment method currently (e.g., those accepting bitcoin for freelance work, merchants who accept bitcoin for goods and services, etc.) and all but the larger businesses will continue to do so, just without publicly advertising that they accept bitcoin.

I don't think that's the target here for this law. What they are likely trying to prevent is those in Russia from using bitcoin to make payments to buy goods and services -- especially for imports, where that displaces the use of the ruble in that role. They know they this isn't going to stop individuals from doing some online shopping where bitcoin is the payment method, but this new law will stop bitcoin from becoming the norm as a payment method for importers who bring in containers of goods and for other bulk shipments. And there certainly will be instances where even the government itself will use an intermediary to effectively make payments in bitcoin on the government's behalf where paying with bitcoin is either required by the seller or where the needed foreign currency required by the seller is simply not readily availale by the government.

But because bitcoin is designed to be censorship-resistant, and can be the payment method with the least friction, don't expect it to completely disappear as a payment method, by any stretch of the imagination.