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Russia’s Finance Ministry, Central Bank Agree To Legalize Cross-Border Crypto Payments

Russia

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Jaroslaw Adamowski

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Jaroslaw Adamowski

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Last updated:

June 25, 2023

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Ending a long-term dispute, Russia’s Ministry of Finance has announced it has reached an understanding with the Bank of Russia, the country’s central bank, over the legalization of cross-border payments in cryptocurrencies.

Referring to the sanctions on Russia’s economy resulting from the country’s invasion of Ukraine, Deputy Minister of Finance Aleksey Moiseev told local news agency TASS that both institutions agreed that, in the current conditions, “it is impossible to do without cross-border settlements in cryptocurrency.”

“Currently, people open crypto wallets outside the Russian Federation. It is necessary that this can be done in Russia, that this is done by entities supervised by the Central Bank which are required to comply with the requirements of anti-money laundering legislation, and first of all, of course, to know their client,” the deputy minister said.

Russia’s move is aimed at circumventing sanctions

With many Russian businesses struggling to stay financially afloat as they have been cut off from the global financial system, the move is intended to facilitate foreign trade and imports of key products.

The Finance Ministry has long strived to convince the central bank’s powerful governor Elvira Nabiullina to accept the use of crypto by local entities. The ministry could also count on the support of some senior politicians, including Anatoly Aksakov, the head of the State Duma’s Financial Markets Committee, who declared at a press conference on July 7 that a crypto exchange should be established as a division of the Moscow Exchange (MOEX).

Despite these efforts, the central bank has long maintained that the government should instead focus on promoting its own central bank digital currency (CBDC). A document dated August 11 and released by the institution said a digital version of the ruble may become available and be available for settlement between individuals and companies as early as in 2023.