Russian Authorities Agree to Allow the Use of Crypto for Cross-Border Settlements

The Central Bank of Russia and the country’s Ministry of Finance recently agreed on a bill proposing the use of cryptocurrency for cross-border payments. The development seems to be a reversal of the government’s negative approach toward crypto. 

Crypto for Cross-Border Payment

According to local news media Kommersant on September 22, 2022, Russia’s deputy prime minister Aleksey Moiseev, stated that the Russian central bank reportedly agreed to the proposal. The government official said:

“Now we have a bill in this part already agreed with the Central Bank on the whole … It generally describes how to acquire cryptocurrency, what can be done with it, and how it can or cannot be settled with it in the first place in cross-border settlements.”

Moiseev, who revealed the development at the XIX International Banking Forum “Banks of Russia – XXI“. There were earlier reports that the Bank of Russia was considering allowing the use of cryptocurrency for cross-border payment. According to Moiseev at the time:

“As for the regulation of the cryptocurrency market, the difference in approaches has remained. But I can say that the Central Bank has also rethought [the approach], taking into account the fact that the situation has changed, and we are rethinking it. Because the infrastructure that we plan to create is too rigid for the use of cryptocurrencies in cross-border settlements, which, of course, we must, first of all, legalize somehow.”

Meanwhile, the official stated that the proposal was looking to enable Russians to easily access crypto wallets, adding that citizens could open crypto wallets in Russia using institutions under the central bank’s supervision. 

“Now people are opening crypto wallets outside the Russian Federation. It is necessary that this can be done in Russia, that this is done by entities supervised by the Central Bank, which are required to comply with the requirements of anti-money laundering legislation, and first of all, of course, to know their client.”

Russia’s Relationship With Crypto

While the latest news seems to indicate the government’s positive attitude towards crypto, Russia has blown hot and cold when it came to the nascent industry. In January 2022, the Bank of Russia proposed a blanket ban on cryptocurrency trading in the country, stating that digital assets were a threat to the country’s financial system. 

The apex bank also touched on crypto mining, stating that the activity jeopardizes Russia’s green energy initiative and created “incentives for circumventing attempts at regulation.“

However, Ivan Chebeskov, the Director of the Department of Financial Policy at the Ministry of Finance argued that it was better to provide a robust crypto regulatory framework, rather than proposing a complete ban on digital assets. Former Russian President Dmitry Medvedev also opposed the ban, stating that such a move could have adverse effects. 

In April, the Finance Ministry introduced a bill proposing the legalization of crypto payments and mining activities. President Vladimir Putin later signed a new bill prohibiting the use of crypto for payments.