Russia is considering enabling cryptocurrency to be used for foreign payments.
Russia is considering embracing cryptocurrencies for international payments as a way to counteract the impact of Western sanctions. According to Ivan Chebeskov, the Head of the Financial Policy Department under the Ministry of Finance, the Russian government is actively researching the possibility of using cryptocurrencies for international settlements. Using crypto as a form of international trade settlement, according to Chebeskov, will help Russia overcome the consequences of Western sanctions, which have curtailed Russia’s access to traditional cross-border payment channels. Meanwhile, Russian authorities are attempting to keep control over the country’s crypto sector and digital currency usage. The cryptocurrency market is regulated in many ways by the Central Bank and the Finance Ministry, for example.
The Central Bank of Russia has proposed an outright ban on cryptocurrency trading and mining, arguing that these activities endanger the country’s financial stability. The Finance Ministry, on the other hand, proposes establishing laws that discriminate between white and gray markets. While the government wants to use cryptocurrency for payments, the Central Bank and Finance Ministry must first agree on how to control the cryptocurrency market. Months of discussions have gone on, yet nothing has come of them. Russia’s consideration of cryptocurrency as a payment method comes as the country’s economy continues to deteriorate. The fall is due to western sanctions implemented by the United States and the European Union after the nation attacked Ukraine. While Russia aims to use cryptocurrency to counteract the effects of western sanctions, Changpeng Zhao, the CEO of Binance, believes the government will be unable to do so. Cryptocurrencies, he claims, are too traceable, a feature that renders them unsuitable for avoiding sanctions. While cryptocurrency exchanges have stated that they would not ban all Russians from using their services, they have lately strengthened their restrictions. Binance, for example, said that it will limit its services to Russian persons and businesses with crypto holdings of more than $10,885. Coinbase has also announced that it would shut down some Russian accounts due to the sanctions.
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