Russia okays foreign crypto, not domestic

Western sanctions take a heavy toll on Russi’s economy, so the country is looking for alternative ways to facilitate foreign trade. However, it is still reluctant to legalize crypto for domestic payments.

A stock photo of a stop road sign with a small Russian flag in background.

Bank of Russia Chair Elvira Nabiullina indicated the possibility of using crypto for international payments under the condition that it won’t penetrate the Russian financial system. The regulator pointed out that cryptocurrencies are dangerously volatile and should be approached with caution by retail investors, as reported by RBC Crypto.

“Cryptocurrency should not be traded on organized marketplaces because this asset is too volatile, too risky for potential investors,” she said.

According to Elvira Nabiullina, digital assets should comply with all regulations aimed at protecting investors. For instance, assets trading on exchanges should have an issue prospectus, responsible party, and follow disclosure requirements.

However, Ivan Chebeskov, the Director of the Financial Policy Department of Russia’s Ministry of Finance, announced that the country won’t sell oil for crypto “with a high degree of probability.” At the same time, the official believes that crypto payments can be used to settle smaller trades with “friendly nations.”

Russia’s Ministry of Finance proposed to use cryptocurrencies as an asset instead of a payment option and suggested executing crypto transactions as barter deals. Chebeskov also emphasized that the goal is to provide alternative payments for entrepreneurs, not to pay for everything in crypto, adding that he was talking about business-to-business transactions, not state-to-state ones.

A provision allowing international cryptocurrency payments has already been added to a new draft law on the crypto industry regulation in Russia. The bill “On Digital Currency” is likely to be voted in State Duma in September 2022, the head of the house’s Financial Market Committee, Anatoly Aksakov, revealed. The official added that policymakers are inclined to pass a “harsh” law, despite the Bank of Russia’s decision to abandon its proposal of a total crypto ban.

Aksakov noted that the U.S. Treasury started to tighten its regulatory grip on crypto after some experts voiced their concerns that Russia may use Bitcoin to sidestep sanctions. “There are suspicions that the American intelligence services largely control this market, so there is no desire to fall under their invisible or visible eye when carrying out financial transactions,” the lawmaker claimed.

Earlier, the Russian Export Center announced it was working on introducing a sandbox for international crypto payments in collaboration with the Central Bank and the country’s financial watchdog Rosinfomonitoring. The platform would allow financial institutions to process crypto transactions on behalf of Russian importers and exporters.