Russia’s Central Bank Will Legalize Crypto for Cross-Border Payments

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Due to the ongoing war with Ukraine which has resulted in a slew of restrictions imposed on Russia, the price of its national currency, the Ruble, has been going down. That’s the reason why the country’s central bank has been looking at alternatives, but the market isn’t exactly full of them. In an attempt to bypass the current geopolitical climate, the Bank of Russia has decided that cross-border crypto payments are inevitable at the moment.

While it has always been against the crypto idea, the central bank has now swiftly changed its mind. Running out of options for cross-border payments, it has joined forces with the Ministry of Finance to accommodate the blow on international payments. The legal framework is apparently laid down, and Russia’s deputy finance minister Alexei Moiseev expects legalization soon.

Turning Within

According to Moiseev, many Russians use international websites to buy and store their cryptocurrencies. With the latest law, this must be done in Russia now. The Bank of Russia will supervise selected organizations for this purpose, but they must adhere to KYC and anti-money laundering regulations.

This isn’t a new concept. Cryptocurrencies as payments in Russia were first proposed in late 2021. President Vladimir Putin wasn’t that fond of the idea, saying it was “still premature”. However, the stance has shifted following the Ukraine war due to the many economic penalties from the west.

Historically, Russia has always opposed the cryptocurrency idea. In 2020, lawmakers approved crypto regulation which essentially outlawed the usage of Bitcoin for payments. The Russian Ruble was pretty strong at that point, so there was no need for further crypto payments. But, running out of options due to current economic restrictions has pushed the country to turn to cryptos for at least cross-border payments.

What Follows?

The deputy finance minister says that crypto legalization in Russia will follow sooner or later. And it’s only logical to happen, considering the first cross-border payments in crypto should be completed soon. There are a few things to iron out still. The central bank’s governor Elvira Nabiullina suggested that cryptos can be used for cross-border payments, but only if they don’t enter Russia’s financial system.

Moiseev admitted that the framework right now is ‘too rigid’ and that changes need to be introduced for cryptocurrencies to be legalized. If and when they are, Russia may move the crypto price needle in a positive direction. Prices have been dropping and now it’s a good time to invest, but it’s pretty obvious that the crypto hype is losing steam. Some experts are optimistic in the long run, others say that we’re witnessing the death of cryptocurrencies.

Whatever it is, if Russia starts making crypto cross-border payments, it’ll surely have a positive impact on the overall crypto community. It’s a big country with a lot of export, mainly on oil and gas. Using cryptocurrencies for this purpose will bypass a lot of bureaucracy, and since Russia isn’t high on diplomacy right now, cryptos are the obvious choice.

September 7, 2022: • No Comments

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