Russia legalizes cryptocurrencies for cross-border transactions

09/08/2022 / By Arsenio Toledo

The Central Bank of the Russian Federation has approved a policy legalizing the use of cryptocurrencies for cross-border payments.

Russian lawmakers have been historically opposed to the idea of using cryptocurrencies as a payment method. In 2020, the government passed a law that prohibited the use of cryptocurrencies for payment purposes. The central bank has also been skeptical because it wants to protect the status of the ruble as the only legal tender in Russia.

In late 2021, Russian President Vladimir Putin said it was “still premature” to talk about using crypto for trading energy resources like oil and gas.

But the idea of allowing cryptocurrency payments for national trades in Russia persisted. And on Monday, Sept. 5, local news agency TASS reported that the central bank finally reached an agreement with the Ministry of Finance to legalize cross-border cryptocurrency payments.

Deputy Minister of Finance Alexei Moiseev noted how important it was for Russia to legalize and support local cryptocurrency platforms. He added that many Russians rely on foreign platforms to open cryptocurrency wallets, a dangerous situation given Western sanctions.

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

The central bank later clarified that it is still formally opposed to the legalization of cryptocurrency payments within the country, and that it was only giving the green light for international transactions.

Bank of Russia Governor Elvira Nabiullina herself warned that cryptocurrencies can be used for cross-border payments only if there are frameworks in place to make sure the cryptocurrency assets don’t enter Russia’s domestic financial systems.

Coordinated Western sanctions force Russia to turn to crypto

The new policy was enacted due to geopolitical changes influenced by the Western economic sanctions preventing Russia from accessing other platforms to facilitate international transactions. This leaves Russia with no other choice but to turn to cryptocurrencies. (Related: SWIFT sanctions against Russia may be pointless due to rising alternatives such as Ripple and CIPS.)

Moiseev himself admitted that the central bank reconsidered its position on regulating the cryptocurrency industry because “the situation has changed.” He added that the planned infrastructure is “too rigid” for the use of cryptocurrencies in cross-border transactions, “which we certainly must legalize somehow.”

Moiseev also said that he supports the central bank’s current opposition to legalizing domestic cryptocurrency transactions. But if it were legalized, the government would have to “put it under control so there is no laundering, paying for drugs and so on.”

Russian Prime Minister Mikhail Mishustin has also called for joint efforts between the government and the central bank to develop the necessary tools that “meet the challenges of the new time,” referring to the Western sanctions.

Mishustin said that cryptocurrencies are excellent alternatives to foreign currencies, and that the legalization of crypto transactions for imports and exports will help the country secure sustainable global trade effectively. He added that he is optimistic that cryptocurrencies possess the characteristics to help Russia recover during this trying time.

The prime minister’s economic agenda is focused on revamping the country’s economy “with sufficient liquidity” to ensure the sustainability of Russian enterprises, industries and jobs.

“We need to intensively develop innovative areas, including adopting digital assets,” said Mishustin. “This is a safe alternative for all parties that can guarantee uninterrupted payment for the supply of goods from abroad.”

For more cryptocurrency-related news, visit CryptoCult.news.

Watch this clip from RT noting that the Russian economy is not in danger of collapse despite Western sanctions.

This video is from the High Hopes channel on Brighteon.com.