Russia’s Central Bank Eyes Exploring Crypto For Cross-Border Settlements by Year-End

• Russia’s central bank is launching an experiment into crypto-enables cross-border payments.
• The initiative could last for up to three years and include the use of crypto mined in Russia.
• Several other “crypto sandbox” initiatives are being spearheaded by Russia’s central bank.

Russia is continuing to ramp up its adoption of blockchain and digital assets as its central bank confirms its intentions to leverage crypto for cross-border settlements.

It comes as part of a broader effort by Russian officials to tap into crypto’s potential as an economic asset and fiscal tool amid enduring financial woes.

Crypto Cross-Border

According to local  media reports, the Chairman of the Central Bank of Russia (CBR), Elvira Nabiullina, said that the bank is planning to experiment with crypto-based cross-border settlements.

In addition, Nabiullina noted that they expect the “first deals” to be conducted before the end of 2024.

Furthermore, she clarified that information on participants and the number of transactions will not be disclosed as it is an “experimental legal regime” that relies on international data.

Following the experiment, which could last up to three years, the CBR will decide which steps or adjustments need to be made. According to Nabiullina, this could be done sooner, though this depends on whether early results make it easier to determine general regulation rules.

The news comes shortly after Russian officials began working to implement regulations and taxes on cryptocurrency mining. This included Russian President Vladimir Putin signing the experimental use of crypto into law in foreign economic activity.

Russia’s Crypto Experiments

The Central Bank of Russia has been working on several crypto and blockchain-related experiments, which have gained attention from smaller commercial banks and credit institutions, who are willing  to engage with crypto and even non-fungible tokens (NFTs ).

Recent discussions also mulled the use of said mined cryptos in foreign trade, causing some contention amongst Russian politicians.

Though it could give approved businesses and entities more flexibility to trade overseas, some officials believe mining alone isn’t enough to cover foreign activity.

Spurred mainly by the economic sanctions imposed on Russia for its invasion of Ukraine, crypto and blockchain are being seen as a small but effective lifeline for the embattled nation.