Russian Bank Launches Cryptocurrency Cross-Border Settlement Solution

Key Points:

• Rosbank launched a cryptocurrency cross-border settlement solution and is conducting pilot transactions.
• Russian companies must use the service through KYC procedures at Rosbank and B-crypto.
• Cross-border cryptocurrency transfers may raise concerns in unfriendly countries regarding the circumvention of sanctions.

Rosbank, sanctioned by the United States, has become the first Russian bank to launch a cryptocurrency cross-border settlement solution.

According to a post on local news, the bank is already conducting pilot transactions with corporate and private clients. Russian companies must use the service through Rosbank and B-crypto’s KYC procedures. The Russian fintech service B-crypto provides technical support for cryptocurrency settlements, specializing in international payments in digital currencies.

The importer must provide for cryptocurrency settlements and register the recipient’s crypto wallet. Then the supplier issues an invoice to the Russian company for payment in cryptocurrency, also indicating the address of the crypto wallet.

Next, the importer and B-crypto sign an agreement, and the customer deposits fiat funds to purchase cryptocurrency to an account with Rosbank and leaves an application. The bank transfers money in B-crypto; it buys cryptocurrency in friendly countries and transfers it to a foreign supplier.

However, cross-border transfers in cryptocurrencies, such as those tested by Rosbank, may raise some concerns regarding the circumvention of sanctions in unfriendly countries. Many countries are taking steps to include cryptocurrency transactions in their sanctions regimes. The use of cryptocurrencies to circumvent sanctions may be recognized by them as illegal and lead to legal consequences for participants in operations.

The First Deputy Chairman of the Bank of Russia, Vladimir Chistyukhin, stated that Cryptocurrencies would not become a panacea for international payments, but everything must be done to use any means of settlement with foreign partners.

Currently, a bill on legalizing mining and experimental legal regimes is in the State Duma. After their adoption, the Central Bank plans to start testing cross-border payments in cryptocurrency mined by miners through authorized organizations.

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