Russia central bank approves cryptocurrency for cross-border payments

By: Michael Wilson

September 5, 2022 12:41 PM

The Bank of Russia, which had previously opposed the use of cryptocurrency as a payment option, reportedly agreed to permit cross-border cryptocurrency payments due to geopolitical alteration.

It has been reported that Russia's central bank, the Bank of Russia, has accepted the reality that international crypto payments are here to stay due to the current political climate.

On Monday, the local news agency TASS reported that the Russian central bank had agreed with the finance ministry to legalize crypto for cross-border payments after rethinking its approach to regulating the industry.

According to Alexei Moiseev, Russia's deputy finance minister, the Bank of Russia and the country's finance ministry are working toward regulating cryptocurrency transfers internationally.

According to Moiseev, many Russians use foreign platforms to create a cryptocurrency wallet, highlighting the need for local crypto services in Russia. The official elaborated, "It is essential for this to happen in Russia, involving organizations guided by the central bank, which are obligated to comply with Anti-Money Laundering and Know Your Customer requirements."

Historically, Russian legislators have been against allowing the use of cryptocurrencies like rubles as legal tender. The use of Bitcoin (BTC) and other cryptocurrencies as legal tender was outlawed by Russia's "On Digital Financial Assets" law, which was passed in 2020. To safeguard the Russian ruble's status as the country's sole legal tender, the Bank of Russia has been wary of the prospect of cryptocurrency payments.

In late 2021, the concept of using cryptocurrencies as payment for intra-Russian commerce was first proposed. Putin then said it was "still premature" to use cryptocurrency in oil and gas transactions.

There appears to have been a shift in the situation as a result of Western economic sanctions imposed on Russia for its invasion of Ukraine. As early as May, Russia's Minister of Industry and Trade predicted that the country would "sooner or later" approve cryptocurrency transactions. Even Elvira Nabiullina, governor of Russia's central bank, later said that cryptocurrency could be used for international transactions so long as it didn't enter Russia's domestic financial system.

Moiseev claims that "given that the situation has changed," the central bank has revised its approach to regulating the industry. Furthermore, he mentioned that the planned infrastructure is "too rigid" for the use of cryptocurrencies in international payments. Which, he said, "we certainly must legalize some how."