Russia’s September Crypto Trials Set to Explore New Payment Pathways Amid Sanctions
If the ongoing crypto trials are successful, Russia is likely to authorize the creation of the crypto exchanges. (Photo by Contributor/Getty Images)
Key Takeaways
- Russia could begin cross-border crypto trails soon.
- The lower house of the Russian parliament passed the crypto payment bill in July amid growing payment concerns due to sanctions.
- Russia has had a love-hate relationship with crypto, and the central bank has called for a blanket ban as late as January 2022.
According to reports , Russia could soon begin crypto payment trails for cross-border transactions amid growing pressure on companies due to ongoing sanctions.
The trial, slated for Sept. 1, will utilize an exchange platform and the National Payment Card System to facilitate crypto payments in rubles.
Russia Turns to Crypto Amid Sanctions
Russia’s decision to launch cross-border cryptocurrency payment trials is a direct response to the country’s growing economic isolation.
In July, the lower house of Russia’s parliament passed a bill paving the way for the use of digital currencies in international transactions. President Vladimir Putin subsequently signed the bill into law on Aug. 8.
The move comes as Russian companies face increasing difficulties in sending and receiving international payments due to stringent US sanctions.
The sanctions, which have been in place for some time, were tightened further following Russia’s invasion of Ukraine in 2022. The US has since imposed additional sanctions on various individuals and firms, effectively cutting them off from the global financial system.
As per CCN’s report on Aug.23, there are rumors that Russia is working on an experimental legal framework and might open two crypto exchanges to aid in the country’s foreign economic activities.
If the ongoing crypto trials are successful, Russia is likely to authorize the creation of cryptocurrency trading platforms in question.
Reports suggest the Moscow Exchange and the St. Petersburg Currency Exchange are in line to receive grants to establish the crypto exchanges.
Love-Hate Relationship With Crypto
Russia has had a love-hate relationship with cryptocurrencies, from the early days of crypto mining to discussing its use for cross-border payments.
When Russian President Vladimir Putin first publicly discussed cryptocurrencies, his understanding of the technology led many to believe that Russia could soon emerge as a crypto powerhouse.
However, the country’s central bank has argued against regulating the crypto market until the war began in the second quarter of 2022.
The central bank even requested a blanket ban on crypto-related activities as late as January 2022.
The outbreak of war and escalating sanctions have pushed Russia to seek refuge in cryptocurrencies, a last-ditch effort to safeguard its international trade transactions.
While some might argue that Russia’s use of crypto to evade sanctions paints crypto in a bad light, it’s important to note that Moscow has been driven to this point by necessity, having already explored alternative arrangements such as bilateral fiat currency deals with partner countries.
However, this turn of events also underscores one of cryptocurrency’s core principles: the creation of a borderless payment system.
Russia’s newfound adoption of crypto, despite being motivated by circumstance, highlights the technology’s potential to facilitate international transactions unhindered by traditional financial systems.
Russia’s Crypto Push Shifting Global Trade or Just a Last-Ditch Effort for Survival?
