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Russia seeking legislative option for crypto international trade

Wednesday 5 October 2022 11:12 CET | News

A representative of Russia’s Ministry of Finance has stated the country is seeking a non-restrictive policy for using Bitcoin and crypto in international trade.

 

The Ministry of Finance of the Russian Federation plans to let any industry in the country to accept Bitcoin and cryptocurrencies for international trade without restriction, per a report from local media outlet TASS.

Ivan Chebeskov, director of the ministry, explained in a recent interview that they are going to allow international settlements in cryptocurrencies for any industries without restrictions. However, though the ministry intends to offer a non-restrictive flow for the acceptance of Bitcoin and cryptocurrencies, there seems to be a difference of opinion coming from the Bank of Russia.

The central bank is in favour of creating a full-fledged infrastructure for the circulation of digital currencies in Russia, as the representative said. Thus, while the Ministry of Finance prefers a local approach to the regulation of digital assets, the central bank is pursuing a broader range of regulatory action. Chebeskov detailed that the Ministry of Finance has two primary functions as it relates to the regulation of digital assets for international payments.

A representative of Russia’s Ministry of Finance has stated the country is seeking a non-restrictive policy for using Bitcoin and crypto in international trade.

 

Approach and reasoning

The ministry believes that the country needs local crypto infrastructure, firstly to protect the interests of citizens. Now, those who trade their digital currencies on crypto exchanges are limited. The second reasoning for the implementation of a crypto infrastructure is to control when digital currency is used legally and when not.

In September, the central bank and the Ministry of Finance agreed on a draft bill that would establish a regulatory framework for the acceptance of digital assets as payment. This decision follows an ongoing debate between the two institutions which has seen multiple draft bills, and even led to President Vladimir Putin expressing his concern that the country not miss an opportunity to use their ‘advantage’ in the ecosystem.

The central bank will reportedly begin testing a digital ruble sometime in April 2023. The exchange of the digital ruble for foreign currencies and the opening of digital wallets to non-residents is expected to take place in 2024.

Russia’s crypto gamble

Previously we covered the news about Russia legalising cross-border crypto payments. We found out then that the idea of crypto payments for national trades in Russia surfaced in late 2021, when President Vladimir Putin said it was still premature to use crypto for trades of energy resources like oil and gas.

However, the situation changed amid Western economic sanctions following Russia’s invasion of Ukraine. In May 2022, the Minister of Industry and Trade declared that Russia would legalise crypto payments sooner or later.

In the context of Russia’s invasion of Ukraine, crypto proponents argued that crypto helps undermine Moscow’s authoritarian regime by providing an alternative to the Russian ruble. Proponents argue that crypto provides average Russians and Ukrainians a store of value and medium of exchange that could reduce the humanitarian costs of the sanctions and war. Others view the decentralized and underregulated nature of crypto as a vehicle for illicit transactions, including as a means for Russian individuals and entities to bypass sanctions.

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Keywords: cryptocurrency, digital assets, cross-border payments, Bitcoin
Categories: DeFi & Crypto & Web3
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Countries: Russian Federation
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DeFi & Crypto & Web3