According to reports, the Russian Federation may introduce cryptocurrency into the international payment system to protest the sanctions imposed by the West. This would also be a way to protest against the conflict in Ukraine.
Russia’s role in cryptocurrency development?
Russian news agencies Interfax and Reuters reported Friday that Russia is planning to include cryptocurrency payments in international settlements. This is according to Ivan Chebeskov, head of the financial policy department at the ministry of finance.
Digital currencies are now being discussed for international transactions, he said.
The local newspaper Vedomosti reports that the Ministry of Finance is considering adding an international payment option to the updated crypto law currently being debated in parliament.
A recent statement from the Kremlin’s elite confirms this. According to Denis Manturov, Minister of Finance, Moscow plans to legalize cryptocurrency payments “sooner rather than later.” In April, the Ministry of Finance supported the legalization of the industry in a law titled “On Digital Currency.”
The Bank of Russia governor Elvira Nabiullina admitted in the same month that the central bank was re-examining its approach to digital assets. She said that cryptocurrencies are one of the measures the bank is taking to mitigate the impact of Western sanctions on the Russian economy.
There is no clear indication that Russia will be able to use digital assets to bypass Western sanctions. This is because the cryptocurrency market is not large or liquid enough to meet the superpower’s transactional needs.
The U.S. Office of Foreign Assets Control has prohibited U.S. citizens from doing business with individuals or entities on the List of Specially Designated Nationals and Blocked Persons (SDN). They also apply regardless of the payment methods used. A person paying a Russian company using SDN cryptocurrency will also be in violation of the law.