Key government institutions in Russia have come to a consensus that they need to legalize the use of cryptocurrencies for making international settlements.
The last few months had seen this particular proposal garner support because there have been an increasing number of sanctions imposed by the West due to the invasion of Ukraine in February.
Crypto for cross-border payments
The Finance Ministry in Russia and the Central Bank of Russia (CBR) has come to the conclusion that they cannot make cross-border payments without using cryptocurrencies in these existing conditions.
The institutions were clearly making a reference to the restrictions that have been imposed on Moscow because of the conflict in Ukraine, thereby limiting the country’s access to global finances.
Now, both financial regulators have come to agree that they need to legalize the use of cryptocurrencies for making international settlements.
Alexei Moiseev, the Deputy Finance Minister, said that this was expected to happen soon. The two institutions were previously clashing over the issue of regulation of cryptocurrencies in the country.
The Ministry of Finance had been in favor of legalizing crypto-related activities in the Russian Federation, while the Bank of Russia had been heavily opposed.
As a matter of fact, the Russian central bank had gone as far as suggesting a blanket ban on cryptocurrencies earlier this year.
According to Moiseev, these differences still exist. However, the high-ranking official indicated that when it comes to crypto payments for foreign trading purposes, the CBR has changed its stance.
This is because of the change in the situation. He further stated that they were rethinking their stance because the infrastructure they had intended was too rigid.
Thus, it could not be used for making cross-border settlements with cryptocurrencies, which they first need to legalize.
According to the deputy finance minister, their goal would be to provide Russians with the opportunity of making international payments via cryptocurrency.
But, they would also impose such controls to ensure that it is not possible to use crypto for making drug payments, money laundering, or for other illicit activities.
The Ministry of Finance also suggested that domestic entities be permitted to offer wallets to people, who are opening crypto wallets abroad, under the supervision of the CBR.
Moiseev said that they would have to comply with the know-your-customer (KYC) and anti-money laundering (AML) regulations.
Elvira Nabiullina, the Governor of the Bank of Russia, said in June that crypto could be used for payment purposes, as long as they are not integrated into the Russian financial system.
In light of the statements from Moiseev, the press service of the bank clarified that the finance ministry or the monetary authority was not legalizing crypto for use inside the country.
This means that people will not be able to make payments with it, or exchange it within Russia. It will only be applicable for international payments.
Mikhail Mishustin, the Prime Minister of Russia, recently stated that digital assets could be used as a safe alternative in foreign trading.