Despite the Russian government’s expectation that cryptocurrencies will be legalized as a form of payment, there has yet to be a consensus about crypto in Moscow after months of panel discussions.
Nonetheless, Russia is considering the use of cryptocurrencies for international payments in an effort to mitigate the effects of Western sanctions imposed in response to the country’s invasion of Ukraine.
According to various sources, Ivan Chebeskov, head of the Department of Financial Policy of the Ministry of Finance, is actively evaluating the possibility of incorporating crypto payments.
Chebyskov said the concept of employing digital currency in foreign transactions is being actively discussed.
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Russia feels the pinch of sanctions
Sanctions are sanctions imposed by one nation on another to prevent them from engaging in aggressive behavior or violating international law. They are among the most drastic measures a nation can take.
Western countries have imposed sweeping sanctions against Russia, targeting, among other things, banks, individuals, businesses and major government-controlled and owned industries.
The assets of Russia’s central bank have been frozen to prevent the country from accessing its $630 billion in foreign exchange reserves.
Russia is thinking about using cryptocurrency to make international payments as a way to lessen the effects of western sanctions that were put in place after the country invaded Ukraine. (The Times)
The Finance Ministry has rejected the central bank’s call for a complete ban on cryptocurrencies. The legalization of the asset class seems to have widespread support among the Russian administration.
All of these have been detrimental to Russia’s economy as it deals with the ongoing problem of its own creation – Ukraine.
‘as soon as possible’
According to Moscow’s Minister of Commerce Denis Manturov, cryptocurrencies will be legalized “sooner than later”. In April, finance ministry officials announced their plans to legitimize a draft proposal called “On Digital Currency”.
While the government has crypto at its crosshairs as a means of payment, the Ministry of Finance and the central bank must agree on how to regulate the cryptocurrency market.
Crypto total market cap at $1.24 trillion on the daily chart | Source: TradingView.com
Discussions have taken place over the past few weeks, but so far they are facing a blank wall.
Chebyskov explained that enabling crypto as a form of settlement for international trade would help mitigate the blow from Western sanctions, which have “restricted” Russia’s access to traditional cross-border payments.
Russian currency loss value
In a related development, the ruble has lost 22 percent of its value, resulting in a 15 percent increase in Russia’s inflation rate and a rise in the cost of imported goods.
Meanwhile, Elvira Nabiullina, the head of Russia’s central bank, revealed in April that cryptocurrencies topped the list for mitigating the negative effects of Western sanctions on the country’s economy.
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