Russia is known for its historical stand on opposing the idea of the use of crypto as a method of payment. However, according to a report by the news agency Tass, the Bank of Russia has recently agreed to allow the use of cryptocurrencies as a means of cross-border payments. The bank reportedly admitted that using crypto assets is inevitable amidst the current geopolitical conditions.
The report mentioned that the central bank of Russia has been reconsidering its approach toward regulating the use of crypto. The bank and the finance ministry have decided to legalize crypto as a means of payment for cross-border payments. The report mentioned that the deputy finance minister of Russia, Alexei Moiseev, has stated that the Bank of Russia and Russia's ministry of finance are expected to carry out this legitimization soon.
Considering that several Russians have to rely on foreign platforms to open a crypto wallet, Moiseev delineated the significance of implementing local crypto services in Russia. He said, "It is necessary to do this in Russia, involving entities supervised by the central bank, which are obliged to comply with Anti-Money Laundering and Know Your Customer requirements."
Since the advent of the concept of cryptocurrencies, Russian lawmakers have historically disapproved of using cryptocurrencies as means of payment. On 31st July 2020, Russia enforced a major Federal Law No. 259-FZ, "On Digital Financial Assets, Digital Currency, and Amendments to Certain Legislative Acts of the Russian Federation." This law officially banned the use of cryptocurrencies as a means of payment. The lawmakers took this step intending to ensure they could protect the Russian Ruble as the only legal tender in the country.
It was in 2021 that the idea of using cryptocurrencies as a mode of payment for national trades came to the surface in Russia. At that time, Vladamir Putin, the Russian President, stated that it would still be way too soon and premature to start using cryptocurrencies to trade energy resources like oil and gas.
However, the situation has changed with the recent geopolitical conditions and amidst number of economic sanctions upon Russia as retaliation for Russia's invasion of Ukraine. In May this year, the Russian Minister for Industry and Trade made a statement where he said that "sooner or later," Russia will legalize the use of cryptocurrencies as a means of payment for cross-border payments.
Later, Elvira Nabiullina, the governor of the Bank of Russia, suggested that as long as the cryptocurrencies don't get into the domestic financial system of Russia, they could consider using cryptocurrencies for cross-border payments.
Moiseev mentioned that the central bank of Russia has been rethinking its stance on regulating the industry with the recent changes in economic and geopolitical situations. He further mentioned that the infrastructure they have planned up until now is quite incompliant with using cryptocurrencies for cross-border transactions. They would have to look into it and must legalize the cross-border use of the crypto payments system.