Russia must legalize crypto-cross-border payments

The most important government organizations in Russia have come to the conclusion that they need to make it lawful to utilize cryptocurrencies like bitcoin and ether to make international transactions.

In light of the fact that there have been an increasing number of sanctions placed by the West as a direct result of Russia’s invasion of Ukraine in February, this specific concept has been gaining popularity over the course of the past several months.

Payments made internationally using cryptocurrency

The Russian government’s Ministry of Finance and the country’s Central Bank (CBR) have both come to the realization that, given the current state of affairs, it is impossible for them to conduct international payments without utilizing cryptocurrencies.

The institutions were unmistakably alluding to the sanctions that have been placed on Moscow as a direct result of the situation in Ukraine, which have effectively restricted the country’s access to global financial markets.

Both financial regulators have recently arrived at the conclusion that they need to make it permissible to use cryptocurrencies like bitcoin and ethereum when conducting international settlements.

The Deputy Minister of Finance, Alexei Moiseev, stated that it was anticipated that this will take place in the near future. The two institutions have had disagreements in the past regarding the question of how cryptocurrencies should be regulated within the country.

The Russian Federation’s Ministry of Finance was in support of legalizing operations linked to cryptocurrencies, but the Bank of Russia was strongly opposed to the idea.

In point of fact, early this year, the Russian central bank had even gone so far as to advise a complete ban on cryptocurrency.

The various distinctions

These distinctions, according to Moiseev, are still present now. However, according to the high-ranking person, the CBR has shifted its position on the use of crypto payments for international business reasons. This change was cited as the reason.

The reason for this is that the circumstances have evolved. He went on to say that they were reconsidering their position since the infrastructure that they had planned on constructing was going to be too stiff.

As a result, it could not be utilized for making settlements across international borders using cryptocurrencies, which they must first legalize in order to do so.

The objective

According to the deputy minister of finance, their objective would be to make it possible for people in Russia to use cryptocurrencies like bitcoin to transact with one another across international borders.

However, they would also implement such controls to make certain that it is not feasible to utilize cryptocurrency for the purpose of making payments for drugs, laundering money, or engaging in any other illegal activity.

Additionally, the Ministry of Finance proposed that domestic firms be granted permission, under the supervision of the CBR, to offer wallets to those who are opening cryptocurrency wallets outside of the country.

According to Moiseev, in order for them to be in compliance with the know-your-customer (KYC) and anti-money laundering (AML) requirements, companies will need to do customer due diligence.

The Governor of the Bank of Russia, Elvira Nabiullina, stated in June that cryptocurrencies might be used for payment purposes so long as they were not incorporated into the Russian financial system.

In light of the claims made by Moiseev, the press service of the bank has made it clear that neither the finance ministry nor the monetary authority intend to legalize the usage of cryptocurrencies within the borders of the country.

This means that individuals within Russia will not be able to use it to make payments or exchange it for other currencies. It will only be relevant for overseas payments.

A recent statement made by Mikhail Mishustin, the Prime Minister of Russia, suggested that digital assets could be utilized as a risk-free option in international trade.