Bank of Russia Agrees to Allow Cryptocurrencies for Cross-Border Payments

The Bank of Russia and the country’s Ministry of Finance are reconsidering their approach toward the legalization of cryptocurrencies for cross-border payments. Both agreed on the inevitable future of cryptocurrencies for such purposes in the current market conditions.

As reported on Monday by the local publication, TASS, Russia’s Deputy Finance Minister, Alexei Moiseev confirmed the stance of both the government and the central bank towards cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term.

“I can say that the Central Bank has also rethought [its approach towards cryptocurrencies], taking into account the fact that the situation has changed, and we are rethinking it. Because the infrastructure that we plan to create is too rigid for the use of cryptocurrencies in cross-border settlements, which, of course, we must, first of all, legalize somehow,” Moiseev said in an interview with a local TV channel (translated from Russian).

However, the differences between the Russian government and the central bank regarding regulating cryptocurrencies remain.

The authorities primarily want to control the flow of cryptocurrencies to eliminate the chances of their usage for money laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term.

“Now people open crypto wallets outside the Russian Federation. It is necessary that this can be done in Russia, that this is done by entities supervised by the Central Bank, which are required to comply with the requirements of anti-money laundering legislation, and first of all, of course, to know their client,” the minister added.

Changing Stance

Russian lawmakers until now opposed the usage of cryptocurrencies. In 2020, the country labelled cryptocurrencies as properties but banned their usage for any type of payment. The Russian central bank was also skeptical of cryptocurrencies with its goal to maintain the ruble as the only legal tender in the country.

However, the authorities’ stance changed with the breakout of the Russia-Ukraine war and the rampant economic sanctions imposed by western governments on Russia. Furthermore, last May the Minister of Industry and Trade declared the possibility of using crypto for trade settlements.