In a marked departure from its rigid approach toward cryptos, Russia’s central bank is contemplating legalizing the use of cryptos for settling cross-border payments.
On Monday, Deputy Finance Minister Alexei Moiseev said that the Bank of Russia along with finance ministry is seriously thinking of giving the go-ahead for settling cross-border payments in cryptos.
Amid the volatile geopolitical situation stemming from its war on Ukraine and restricted access to global banking channels, Russia is relying on cryptos to shore up its economy and trade ties. Last week, Russian Prime Minister Mikhail Mishustin said that cryptos are safe alternatives for cross-border payments.
Mr. Moiseev also outlined the need to develop local crypto services in Russia, as most Russians are dependent on using foreign platforms for meeting crypto requirements. “It is necessary to do this in Russia, involving entities supervised by the central bank, which are obliged to comply with anti-money laundering and know-your-customer requirements,” the deputy finance minister said.
If the proposal materializes, Russia will be the second country after Iran to legalize the use of cryptos for cross-border payment settlements. Last week, Iran passed a bill to legalize the use of cryptos for imports in place of USD and Euro.
Meanwhile, Bank of Russia Governor Elvira Nabiullina has stated that there is no harm in using crypto for cross-border payments so long as it is separated from the country’s domestic financial system.
Historically, Russian lawmakers have opposed the use of cryptos as a payment method. In 2020, the country passed a crypto law that officially prohibited the use of cryptos like Bitcoin for making payments.