Russia may use cryptocurrency in international payments as sanctions escalate
Faced with tougher sanctions following its invasion of Ukraine, Russia is reportedly considering the idea of accepting Bitcoin or other cryptocurrencies as payment for its international trade. The Interfax news agency first reported the news on Friday, citing a senior government official.
“The idea of using digital currencies in transactions for international settlements is actively being discussed,” said Ivan Chebeskov, head of the finance ministry’s financial policy department.
Chebeskov’s remarks suggest that the Russian government and central bank, which have pushed for a blanket ban on cryptos, may be getting closer to resolving their differences.
Russia has already floated the idea of allowing the use of cryptocurrency as a means of payment for its oil and gas sold to “friendly countries”. At the time, the head of the energy committee, Pavel Zavalny, said that China and Turkey could start paying for energy in Russian rubles, Chinese yuan, Turkish lira – or even Bitcoin.
According to a report by Russian state news agency TASS, Industry and Trade Minister Denis Manturov said: “The question is when will it happen, how will it happen and how will it be. regulated. Now the Central Bank and the government are actively engaged in it.
Until today, crypto in Russia existed in a legal gray area. Locals were allowed to buy and trade cryptocurrency, but businesses and exchanges were often closely monitored by law enforcement. According to industry estimates, the annual volume of crypto transactions in the country is around $5 billion.
Just days before Russia invaded Ukraine, the central bank said it wanted to ban the use and mining of cryptocurrencies, arguing that they could be used to threaten its sovereignty by monetary policy and the country’s financial stability. Further explaining its unfavorable stance towards cryptocurrencies, the regulator argued that they could be used to fund terrorism and lead to money laundering.
The central bank believes cryptocurrencies bear the hallmarks of a Ponzi scheme, warning of potential bubbles in the market. The Russian apex bank has also expressed concerns about financial stability risks due to the highly volatile nature of crypto transactions.
Available information shows that many Russian entities and individuals were looking to liquidate their assets to acquire properties in crypto-friendly regions, such as the UAE, through crypto.
Putin said earlier this year that cryptocurrencies had a “potential future” as a means of payment. The Russian leader pointed out that cryptocurrency is finding more use cases in the real world. However, Putin was less sure about the fundamentals driving the valuations of cryptocurrencies like Bitcoin.