The Russian Ministry of Finance presented a new draft of a bill that calls for the use of crypto for international settlement payments.
The bill, “On Digital Currencies”, introduced in February, would address a previous draft seeking to ban crypto as a form of payment rather than exploring its merits as an investment vehicle.
The new bill considers proposals made by the Center for National Projects of the Ministry of Economic Development, the Ministry of Internal Affairs, the Ministry of Digital Development, the Federal Tax Service and the Analytical Center. The Finance Ministry will discuss the new bill with the United Russia party.
Limited scope for foreign trade
A representative of the central bank said that while it is theoretically possible to use cryptocurrencies for foreign trade, such applications are limited in their scope. He added that cryptocurrencies “pay far less than traditional payment systems,” and that international regulators can detect and intercept large transactions.
In February, the Central Bank proposed a ban on cryptocurrencies covering cryptocurrency mining, circulation, and possession of crypto, imposing a fine of one billion rubles on anyone in violation of these laws.
Since Russia’s invasion of Ukraine, Binance has blocked the deposit and trading of cryptocurrencies from Russians with assets over $10,000 (Euro 10,000). Russia currently has $630 billion in reserves, half of which is held in foreign currency commercial banks and foreign central banks.
The Bank of Russia bill would prevent banks from engaging in crypto services and owning cryptocurrencies.
Another attempt to evade sanctions?
Maxim Bashkatov, Head of Legal Development Direction at the Center for Strategic Research, said that a proposal to use cryptocurrencies as a settlement vehicle for foreign transactions has been considered for some time.
Bashkatov emphasized that using cryptocurrencies in this way should not be misinterpreted as Russia evading sanctions, but rather as an alternative to international banking protocols SWIFT and payment processors MasterCard and Visa, which all Russia have been out.
He added that this application of cryptocurrencies aligns with one of the fundamentals of cryptocurrencies, which is removing middlemen from transactions.
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