Bank of Russia May Legalize Cryptocurrencies For Cross-border Payments

The Bank of Russia, the country’s central bank, has stated that cross-border crypto transfers are unavoidable, given the current geopolitical environment.

The Russian central bank has reconsidered its approach to cryptocurrency regulation and has reached an agreement with the finance ministry to legitimize cryptocurrency for cross-border payments, according to the local news agency TASS.

According to Deputy Finance Minister Alexei Moiseev, the Bank of Russia and the Finance Ministry expect to legalize cross-border crypto payments soon. Moiseev emphasized the need to enable local crypto services in Russia, saying that many Russians use foreign platforms to open a crypto wallet.

“It is necessary to do this in Russia, involving entities supervised by the central bank, which are obliged to comply with Anti-Money Laundering and Know Your Customer requirements,” the official stated.

Historically, Russian lawmakers have opposed using cryptocurrencies as a payment mechanism. In 2020, Russia passed the “On Digital Financial Assets” law, which legally barred the usage of cryptocurrencies such as Bitcoin (BTC) for payment purposes. The Bank of Russia has been cautious of cryptocurrency payments because it wishes to defend the Russian ruble as the country’s sole legal money.

In late 2021, the notion of crypto payments for national trades in Russia arose. Then, Russian President Vladimir Putin stated that it is “still premature” to utilize cryptocurrency.

The situation appears to have changed due to Western economic sanctions imposed in response to Russia’s invasion of Ukraine. In May, Russia’s Minister of Industry and Trade stated that crypto payments would be legalized sooner or later. Elvira Nabiullina, governor of the Bank of Russia, later said that crypto could be used for cross-border payments, but only provided it does not enter Russia’s domestic financial system.

According to Moiseev, the central bank has revised its approach to regulating business in light of the changing circumstances. He went on to say that the proposed infrastructure is too restrictive for using cryptocurrencies in cross-border payments.

“Which we certainly must legalize somehow,” he concluded.

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