Russia Ministry of Finance Plans to Legalize Crypto for International Transactions

The country’s central bank, the Bank of Russia, has recognised the need to legalize cross-border payments conducted via cryptocurrency transfers.

Payments Could Start as Soon as Next Year

The possibility of beginning cross-border cryptocurrency transfers as early as 2023 was mentioned to Izvestia by Ivan Chebeskov, director of the Financial Stability Department of the Ministry of Finance, and it was confirmed by Anatoly Aksakov, head of the State Duma committee on the financial market.

The Central Bank stated that there are no plans to legalize the use of cryptocurrencies as a form of payment in the Russian Federation or to permit the establishment of cryptocurrency exchanges and exchangers there; however, the matter is being resolved in collaboration with the Ministries of Finance and Economic Development.

Daniil Egorov, the head of the Federal Tax Service, told Izvestia that plans are being made to tax cross-border cryptocurrency transactions. Anatoly Aksakov disagrees with Ilya Trunin, deputy head of the government apparatus. He argues that more time should be invested before the idea of cryptocurrency is incorporated into the Civil Code.

Dmitry Kirillov, a teacher at the Moscow Digital School educational ecosystem, stated that cryptocurrency could be incorporated in the Civil Code among the objects of civil rights as other property or independently, without equating it with existing assets.

The Ministry informed Izvestia of Economic Development that the department is tackling the problem of using digital currencies for cross-border payments in international trade transactions along with the Ministry of Finance and the Central Bank. The Ministry of Economy favors this strategy since it can potentially lessen sanctions pressure in the future, notably on small and medium-sized businesses that have trouble completing payments. The government stressed that this approach could only be added to.

A Paradigm Shift?

Russian legislators have long been against any form of cryptocurrency legalization for payments. In 2020, Russia placed a crucial crypto policy headed “On Digital Financial Assets.” The policy forbade using cryptocurrencies like Bitcoin (BTC) for payments. The Bank of Russia has been leery of cryptocurrency payments because the Russian Ruble is the only legal cash in the country.

This idea of legalizing cryptocurrency for transactions first emerged in Russia at the end of 2021. Vladimir Putin, the president of Russia, said it was “still early” to trade cryptocurrencies for energy resources like oil and gas. However, the situation has changed due to financial sanctions imposed by the West and the expulsion of most Russian banks from the SWIFT network. 

The governor of the Bank of Russia, Elvira Nabiullina, later proposed that cryptocurrency may be used for international payments, but only provided it didn’t enter Russia’s domestic financial system. This was confirmed in May by the Minister of Industry and Trade, who said that Russia would “sooner or later” authorize cryptocurrency payments.

The verdict demonstrates how the sanctions imposed on Russia are actually advancing the adoption of new technologies.