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- The Central Bank of Russia may soon utilize cryptocurrencies for international settlements.
- Cross-border settlements using crypto are a hot topic among several central banks globally.
The Russian Central Bank is considering using cryptocurrencies for international settlements. This means that Russians could be developing regulations of cryptocurrencies aimed at a crypto-based economy. Amid the battle with Ukraine, Russia is actively considering crypto usage to circumvent sanctions.
The Statement of the President of The Russian Central Bank
As per the local media sources, the head of the bank spoke about crypto regarding international settlement options at an event with representatives of the New People party. Notably, the Central bank was earlier opposed to the use of cryptocurrency.
The President of the Russian Central Bank, Elvira Nabiullina, mentioned that a draft for the law has already been prepared to start the trial. The use of cryptocurrencies for international payments is a topic discussed by many central banks worldwide. According to a recent tweet by a cross-chain transaction platform, iCrosschan(dot)io, most institutions are cautious about the volatility of cryptocurrency prices and their potential use in illegal activities.
As per the statement by the President of the Central Bank of Russia, cryptocurrency would be allowed to be used in international payments on a trial basis.
As per Reuters, the CBR chief said Russia is building its international reserves with assets that Western sanctions cannot affect. “The Western countries froze nearly $300 Billion or half of the country’s international reserves after Moscow sent tens of thousands of troops into Ukraine in the previous year.”
Previously, the Central Bank stated that “it considers Gold, Chinese Yuan, and foreign currency held in cash as safe from possible further rounds of Western sanctions.”
In the country, particular institutions will be built to engage in mining and transfer cryptocurrency to foreign structures. Such institutions will also deal with operations with other digital finance. The Russian Central Bank is also consulting with the government about which institutions the transactions could go through. It was assumed that, at first, these duties could be entrusted to a state company, followed by private enterprises.
According to CoinMarketCap, cryptocurrencies are most actively used in countries with high inflation. Venezuela has the world’s highest inflation rates and is recording increasing crypto adoption.
Noteworthily, the New York Times reported last year that the Russian government is developing its central bank’s digital currency, a digital Ruble. The country hopes to trade directly with other countries willing to accept it without converting it into dollars.
It further reported that the “hacking techniques such as ransomware could help Russians steal digital currencies and makeup revenue lost to sanctions.”
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
