Russian Ministry of Finance uses crypto for international settlements


The Russian Ministry of Finance has submitted a new bill that calls for the use of cryptography for international settlement payments.

The bill, “On Digital Currencies,” was introduced in February, which would remedy previous plans to ban crypto as a form of payment, rather than exploring its merits as an investment vehicle.

The new bill takes into account the proposals made by the Ministry of Economic Development, the Ministry of the Interior, the Ministry of Digital Development, the Federal Tax Service and the Center for National Projects of the Analytical Center. The Ministry of Finance will discuss the new bill with the United Russia party.

Limited scope of foreign trade

A central bank representative noted that while it is theoretically possible to use cryptocurrencies for foreign trade, such applications are limited in scope. He said cryptocurrencies “serve far fewer payments than traditional payment systems” and international regulators can detect large transactions and stop them.

In February, the Central Bank proposed a ban on cryptocurrencies, covering the mining, circulation and possession of cryptocurrencies, imposing a fine of one billion rubles on anyone who violates these laws.

Since Russia’s invasion of Ukraine, Binance has prevented depositing and trading of cryptocurrencies from Russians with assets above $10,000 (EUR 10,000). Russia currently holds $630 billion in reserves, half of which is held abroad in commercial banks and foreign central banks.

The Bank of Russia bill would prevent banks from engaging in crypto services and owning cryptocurrency.

Another attempt to evade sanctions?

Maxim Bashkatove, head of legal development at the Center for Strategic Research, said the proposal to use cryptocurrencies as a means of settlement for foreign transactions has been considered for some time.

Bashkatove stressed that the use of cryptocurrency in this way should not be interpreted as an avoidance of sanctions by Russia, but rather as an alternative to the international banking protocol SWIFT and payment processors MasterCard and Visa, which are all withdrawn from Russia.

He said this application of cryptocurrencies aligns with one of the original principles of cryptocurrency, which removes middlemen from transactions.

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