Russia Considers Legalizing Cross-border Payments in Cryptocurrencies
On September 05, 2022, the Ministry of Finance and the Bank of Russia announced that they are rethinking their approach to cryptocurrencies, expecting to regulate them “in the near future” to allow for cross-border payments.
According to Deputy Finance Minister Alexei Moiseyev, both entities agree that given the political situation the country is experiencing after the economic sanctions imposed by the United States, “there is no way out without cross-border settlements in cryptocurrencies.”
Russia Plans to Regulate Cryptocurrencies as Soon as Possible
Moiseyev noted that a regulatory framework should be introduced as soon as possible, not only to enable cross-border payments but also for Russia to have greater control over cryptocurrency transactions to prevent illicit activities such as money laundering, drug trafficking, and scams, among others.
“The infrastructure we plan to create is too rigid for the use of cryptocurrencies in cross-border settlements, which, of course, we should first legalize somehow.”
He also added that the regulation will allow Russian citizens to have the option to store their cryptocurrencies in Russian-based crypto wallets or platforms, which have the endorsement of regulatory bodies to ensure greater transparency.
“Now people open cryptocurrencies [accounts] outside the Russian Federation. It should be possible to do this in Russia so that it could be done by subjects supervised by the Central Bank, which must comply with the requirements of anti-money laundering legislation, and first of all, of course, know your client.”
Similarly, Russian Prime Minister Mikhail Mishustin said at the St. Petersburg Economic Forum that sanctions have negatively impacted Russian businesses and the population. Hence, they must introduce “digital assets” to achieve “technological independence and cybersecurity of financial institutions.”
Crypto vs Sanctions
On August 29, the Iranian government approved a set of cryptocurrency regulations to allow import payments via Bitcoin (BTC) and other cryptocurrencies. The ulterior motive was to find a way to circumvent the U.S. economic blockade.
Iran has already paid $10 million in crypto for its first batch of imported vehicles. This technology could also be the way out that Russia is looking for as it finds itself economically cornered by the U.S. since the beginning of its war against Ukraine.
Other sanctioned countries, such as Venezuela or Cuba, have legalized the use of cryptocurrencies to cope with the economic war, positioning themselves among the countries with the highest crypto adoption in Latin America.
Although this move by Russia may be beneficial for the state and its citizens, it seeks to directly evade international sanctions, which is why yesterday, the Treasury’s Office of Financial Sanctions Implementation made a statement requiring cryptocurrency exchanges to immediately report any suspected breach of sanctions to the U.K. authorities.
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