Rosbank uses crypto for cross-border payments

Rosbank, one of Russia’s systemically important banks, has announced the launch of a new cross-border settlement solution in the realm of cryptocurrencies.

The financial institution’s representative confirmed that Rosbank is currently engaged in pilot transactions with both corporate and private clients to test the new system.

Already under pilot

Vedemosti, the media outlet responsible for initially reporting the information, first shared the news on June 2, reaching out to 50 major banks for comment on if this was the only offering of its kind. The outlet received no response, suggesting that this service would be the first of its kind in the sector.

Rosbank’s announcement came in collaboration with local crypto firm B-Crypto; Rosbank has initiated a system where B-Crypto acts as an intermediary, purchasing cryptocurrencies abroad on behalf of importers and subsequently transferring the digital assets to foreign suppliers. 

The bank has already commenced pilot transactions with corporate and private clients, while B-Crypto specializes in facilitating international payments using digital currencies.

Under the pilot platform, companies can pay for imported goods or services in cryptocurrency after undergoing the necessary know-your-customer (KYC) procedures. 

Notably, vendors are required to submit invoices denominated in crypto rather than traditional fiat currencies. Instead of buying cryptocurrencies directly, participating firms deposit fiat funds into a dedicated Rosbank account, which is subsequently transferred to B-Crypto. 

The crypto firm then carries out the purchase of cryptocurrencies in crypto-friendly nations and transfers them to the designated foreign suppliers in compliance with current Russian legislation and the Central Bank of Russia (CBR).

Under multiple opinions

The existing law, known as the “On Digital Financial Assets,” currently prohibits Russian residents from accepting digital currencies as a means of payment for goods and services.

However, lawmakers in the State Duma are actively contemplating amendments that would broaden the scope of the legal framework. These amendments aim to encompass cryptocurrencies and establish “experimental legal regimes” to legalize crypto transactions.

On the other side, just over a week ago, at the end of May, Russian lawmakers had reportedly abandoned their proposed legislation for a government-backed cryptocurrency platform, as per regional newspaper Izvestia.

Instead, they have opted to establish a regulatory framework that enables private enterprises to launch their own crypto trading platforms, operating under the supervision of the Russian central bank.

This new development suggests a positive step for Russia’s stance on cryptocurrencies, although it is undetermined what the country’s response to this announcement will be just yet.