Bank Of Russia To Legalize Crypto For Cross Border Payments

September 7, 2022 10:57 pm Comments

Russia’s central bank has traditionally been very reluctant on crypto and has even been opposed to the use of it in the past.

However, it seems that current geopolitical changes have caused the Bank of Russia to now agree to allow cross border payments to be done in crypto.

Specifically, the bank admits that the current geopolitical conditions make crypto inevitable for cross border transfers and has therefore caused the bank to rethink their approach on how to regulate crypto.

As a result, it is expected that it will soon be legalized for cross border payments despite the fact that the bank is still opposed to legalizing domestic crypto payments.

CoinTelegraph reports:

Moiseev outlined the importance of enabling local crypto services in Russia, noting that many Russians rely on foreign platforms to open a crypto wallet.

“It is necessary to do this in Russia, involving entities supervised by the central bank, which are obliged to comply with Anti-Money Laundering and Know Your Customer requirements,” the official stated.

The Bank of Russia subsequently clarified that it is still opposed to legalizing crypto payments within the country despite giving the green light to cross-border payments.

“It is important to emphasize that we are not talking about the legalization of cryptocurrency as a means of payment on the territory of our country,” the central bank said in a statement to local news agency RIA Novosti.

Russian lawmakers have been historically opposed to the idea of using cryptocurrencies as a payment method.

In 2020, Russia adopted a major crypto law, “On Digital Financial Assets,” which officially prohibited the use of cryptocurrencies like Bitcoin (BTC) for payment purposes. The Bank of Russia has been skeptical about the idea of cryptocurrency payments because it wanted to protect the Russian ruble as the only legal tender in the country.

Due to economic sanctions that were put in place as a result of the Russian-Ukraine conflict, the country has seemed to taken completely different turn when it comes to the use of digital assets.

With that being said, Russian president Vladimir Putin said that it was still too early for crypto to be used for national trades involving oil and gas.

However, with the conflict, it seems that the timeline has been accelerated significantly and all options are now on the table.

As the central bank of Russia considers the current situation within the country, it seems that this trend might first begin in Russia, but may also eventually influence other countries to one day also use crypto for cross border payments.

FinancialExpress concludes:

In Russia, the concept of using cryptocurrencies as a form of payment first emerged in late 2021. Then, Russian President Vladimir Putin remarked that using cryptocurrency for the trading of energy resources like oil and gas was “still premature.”

Following Russia’s invasion of Ukraine, the situation appears to have shifted as a result of economic penalties from the West.

Elvira Nabiullina, the governor of the Bank of Russia, later suggested that cryptocurrency can be used for cross-border payments but only if cryptocurrency does not enter Russia’s domestic financial system.

In May, the Minister of Industry and Trade declared that Russia would legalise crypto payments “sooner or later.”

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