Russia advises businesses to counter sanctions with crypto

The sanctions have notably impacted Russia's trade with non-sanctioning nations such as China, India, the United Arab Emirates, and Turkey in recent weeks, according to Reuters. Furthermore, Key Russian financial entities, including the Moscow Stock Exchange and domestic alternatives to SWIFT, have been specifically targeted by these measures. 

Representatives from the Russian Central Bank acknowledged that payment challenges represent a significant barrier for the Russian economy. Speaking at a financial conference in St. Petersburg, they highlighted the evolving landscape of financial technology and emphasised the relaxation of policies regarding cryptocurrencies for international payments. 

They also noted the adaptability of businesses in finding solutions in the context of pressures exerted by sanctions, although many strategies remain undisclosed to regulatory authorities. Officials expressed confidence that alternative global payment systems, independent of Western influence, would gradually emerge, citing ongoing discussions among BRICS countries about a potential BRICS Bridge payments system. However, caution was raised that establishing such a system would require extensive time and effort. 

In turn, representatives from VTB, Russia's second-largest lender, echoed concerns about the sensitivity of discussing mechanisms to facilitate international payments. They talked about the need for such information to be classified as state secrets, underscoring the swift and watchful reactions of Western counterparts to any developments in this domain.

Russia’s CBDC progress

In July 2024, The Russian Central Bank decided to significantly expand its digital ruble pilot programme starting 1 September 2024. The main goal of this endeavour was to include a broader range of clients and transactions. The pilot, which initially involved 600 individuals across 11 cities and a small group of banks, aimed to enter a new phase that would enable participation from a larger number of banks and a diverse set of individuals and companies. 

Officials from the Russian Central Bank announced the expansion during the Russian Financial Congress, noting the increased demand from citizens and businesses to use the digital ruble.