Russia Open to Idea of Allowing Crypto Use for Cross-Border Payments: Report

Russia is historically known for its hostility towards the use of cryptocurrencies for digital payments.

Written by Shomik Sen Bhattacharjee, Edited by Richa Sharma | Updated: 6 September 2022 10:59 IST

Russia Open to Idea of Allowing Crypto Use for Cross-Border Payments: Report

Photo Credit: Unsplash/ Mohd Azrin

There are speculations about what cryptocurrency Russia will use for cross-border payments

Highlights

Russia's stance towards crypto has softened in recent months
The change in stance arrives as the country navigates western sanctions
Russia's central bank had earlier proposed a ban on crypto transactions

The Bank of Russia and the country's Ministry of Finance have reconsidered their positions toward cryptocurrency, acknowledging it to be necessary to legalise the use of crypto in cross-border settlements. As per local news reports, the two government bodies have agreed that "it is impossible" to continue without enabling cryptocurrencies as a legal payment method for international trade. The move comes as Russia tries to find ways to regulate the crypto market within its borders while being swamped in western sanctions.

According to a report by TASS, Russia's Deputy Finance Minister Alexei Moiseev said that the reliance Russians have on foreign platforms for crypto transactions further emphasises the need to legalise the industry locally.

Moiseev said, "Now people open crypto wallets outside the Russian Federation. It is necessary that this can be done in Russia, that this is done by entities supervised by the Central Bank, which are required to comply with the requirements of anti-money laundering legislation, and first of all, of course, to know their client."

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According to the Ministry of Finance, Russia's approach to cryptocurrencies will remain relaxed, as the infrastructure they plan to launch is too rigid for crypto. "On the one hand, to give people the opportunity to do it, on the other hand, to put it under control so that there is no laundering, paying for drugs, and so on," Moiseev said, adding that the regulatory framework will still have to be introduced.

The Kremlin has had a tenuous relationship with cryptocurrencies to keep the Russian Ruble as the only legal tender in the country. After banning crypto payments in January 2021, the Central bank proposed banning crypto mining in January. President Putin also said in October 2021 that it was too early to use crypto for energy payments. More recently, another bill prohibiting the use of digital financial assets passed the first reading in June 2022. However, Russia's stance towards cryptocurrencies appears to have softened generally in recent times.

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