The Russian central bank has seemingly changed its directive on how to regulate cryptocurrencies, and is now working with Russia’s Ministry of Finance to legitimize its use for international payments. As a result, the country will reportedly be looking to legalize cross-border cryptocurrency payments in the near future.
News reports citing TASS, a local Russian news agency, claim that the move is part of an effort to circumvent the country’s SWIFT (the international payment system) disconnection, thereby enabling payments to and from local vendors.
Alexei Moiseev, Russia’s Deputy Finance Minister, has pointed out that many Russians have used international sites to create cryptocurrency wallets. “This must be done in Russia,” the official said, “engaging organizations under the central bank’s supervision who are required to adhere to Know Your Customer and anti-money laundering regulations.”
Another crypto-friendly move by the Russian government was taken in June this year, when the Russian government approved a draft law that could potentially exempt digital asset and cryptocurrency issuers from value-added tax. The document also proposed the reduction of income tax rates on sales of digital assets.
Russia Outlawed Crypto Payments In 2020
The ‘On Digital Financial Assets‘ crypto regulation proposal was approved in Russia in 2020, and saw the usage of cryptocurrencies like Bitcoin (BTC) outlawed as a payment method. Since the Russian ruble is the only form of legal tender in the nation, the Bank of Russia has been wary of the facilitation of cryptocurrency payments in any form, and Russian legislators have long been against the concept of allowing cryptocurrencies to be used as payment.
However, Governor of the Bank of Russia Elvira Nabiullina later suggested that cryptocurrency could be used for cross-border payments, but only if the asset class is not allowed to enter Russia’s domestic financial system. The Minister of Industry and Trade further reiterated the sentiment, declaring that Russia would legalize crypto payments “sooner or later.”
On the Flipside
- Market proponents fear that cryptocurrencies, particularly Bitcoin (BTC), will be even more heavily monitored by the U.S. and the UK after Russia legalizes the use of crypto in international trade.
Why You Should Care
Supporters of Russia’s war have managed to provide monetary aid to the Russian army through cryptocurrencies. One pertinent example is the producer of Lobaev arms, who was regularly seen asking subscribers on his Telegram channel to donate crypto to enable Lobaev to provide more ammunition to Russian troops in Ukraine.