The Bank of Russia has openly contemplated permitting crypto transactions to function as a long range payment medium, a move showing departure from its longstanding prohibition against such actions and adopting cryptocurrency.
Adoption Decentralization
The country’s central bank and the Ministry of Finance have agreed that cryptocurrencies will not be viable without cross-border settlements under current geopolitical conditions.
Deputy Finance Minister Alexei Moiseev said crypto payments will soon be legalized. However, the focus was on citizens using foreign platforms to open crypto wallets.
Instead of the official cash payment gateway, he highlighted the need for allowing domestic crypto services in Russia which will be monitored by the central bank itself, which must comply with AML and know-your-client (KYC) requirements.
“Since our plan will require fiat currencies to be used in cross-border settlements, we must first legalize them in some way. Also, give people the opportunity to do it and control it so there is no laundering, paying for weapons, and so on.”
Clearly, the Deputy Governor of Russia’s Central Bank, Ksenia Yudaeva, stated that the authorities are open to allowing the use of cryptocurrency for international payments.
Why Reform?
This possible cause of the change in heart may be the result of the ongoing Russia-Ukraine conflict. Bitcoin and cryptocurrencies, in general, have found broad use among both nations.
The Ukrainian government has received a considerable amount of philanthropic donations from cryptocurrency investors who are using the money to buy weapons and medic kits.
For Russia, on the other hand, reports say that the country engages in economic activity with other countries by leveraging digital currencies and circumventing international sanctions.
With sanctions already in place, does adopting cryptocurrency put Russia a step ahead?