The Bank of Russia, the country’s central bank, has reportedly admitted that cross-border payments in cryptocurrency are inevitable in the current geopolitical conditions.
The Russian Central Bank is rethinking its approach to regulating cryptocurrencies and has agreed with the Ministry of Finance to legalize cryptocurrencies for cross-border payments, local news agency TASS reported on Monday.
Reportedly, Deputy Finance Minister Alexei Moiseev said that the Bank of Russia and the Ministry of Finance expect to legalize cross-border payments in cryptocurrencies soon.
Moiseev explained the importance of enabling domestic crypto services in Russia, noting that many Russians rely on foreign platforms to open a crypto wallet. “It is necessary to do this in Russia, including entities supervised by the Central Bank, which are obligated to comply with anti-money laundering and KYC requirements,” the official stated.
The Bank of Russia later clarified that it still opposes the legalization of crypto payments within the country despite giving the green light to cross-border payments. “It is important to emphasize that we are not talking about the legalization of cryptocurrency as a means of payment on the territory of our country,” the central bank said in a statement to the local news agency RIA Novosti.
Russian lawmakers have historically opposed the idea of using cryptocurrencies as a means of payment. In 2020, Russia adopted a major cryptocurrency law, “On Digital Financial Assets,” which officially prohibits the use of cryptocurrencies such as Bitcoin (BTC) for payment purposes. The Bank of Russia was skeptical about the idea of cryptocurrency payments because it wanted to protect the Russian ruble as the country’s only legal tender.
The idea of cryptocurrency payments for national exchanges appeared in Russia in late 2021. After that, Russian President Vladimir Putin said that it was “still too early” to use cryptocurrencies to trade energy resources such as oil and gas.
The situation appears to have changed amid Western economic sanctions in the wake of the Russian invasion of Ukraine. In May, the Minister of Industry and Trade announced that Russia would legalize cryptocurrency payments “sooner or later.” Bank of Russia Governor Elvira Nabiullina later also suggested that digital currencies could be used for cross-border payments, but only if the cryptocurrency did not enter Russia’s domestic financial system.
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According to Moiseev, the Central Bank reconsidered its approach to regulating the industry, “given that the situation has changed.” He added that the planned infrastructure is “too rigid” to use cryptocurrencies in cross-border settlements. “We definitely have to legitimize somehow,” he concluded.