Amid the large-scale exclusion of Russia from Western financial circles due to its invasion of Ukraine, the country is turning to less-than-traditional ways to do business and transfer money across its borders, including setting up ‘special organizations’ to carry it out.
Indeed, the central bank of Russia is working to create ‘special authorized organizations’ through which cryptocurrency mining and settlements with foreign economic entities would take place, according to the head of the Bank of Russia, Elvira Nabiullina, Russian news outlet TASS reported on April 17.
Crypto is fine – for transactions abroad
Interestingly, the Russian authorities aren’t thrilled about the use of crypto assets inside the country, but now they seem to be willing to ease up their stance, at least where external transfers are concerned. As Nabiullina told the lower house of the Federal Assembly of Russia, also known as the State Duma:
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“We adhere to the same position that, within the country, cryptocurrency (…) should not be used. As for foreign payments, we assume that this is possible in the form of an experiment. This bill is also being prepared as a kind of an experimental legal regime.”
To this end, the planned organizations would carry out crypto mining and settlements with foreign entities. As for what these ‘special’ organizations will be, the central bank’s deputy chairman Alexei Guznov told journalists that discussions were underway and that the first phase might involve companies with state participation, with the possibility of private companies following.
“An analysis will be carried out of what kind of organization this can be. For now, there is just a discussion with the government, so that their sphere of activity is understood, which banks they serve, and how much they can interact with representatives who are engaged in foreign trade activities. A little later, it will be clear by name,” Guznov said.
Russia’s crypto plans
Back in December 2022, the Bank of Russia announced its plans to test the use of cryptocurrencies for international payments within the regulatory sandbox framework, and the recent statements seem to indicate that these plans are still in motion.
Earlier in November, Finbold reported that the State Duma had begun working on establishing regulations for the creation of an official Russian crypto exchange. However, the Bank of Russia Deputy Governor Alexey Zabotkin has warned that the use of crypto as an investment tool in Russia was risky.