Russia is increasingly open to the crypto industry. For example, Russian companies are now allowed to use crypto in international payments to avoid sanctions imposed by the West. Apparently, companies are interested in this, and now a large bank from Russia has announced that it will participate.
Russia is turning pro-crypto
In April of 2022 the Russian government announced that it would become legal to pay with cryptocurrencies in international transactions. Shortly afterwards, President Putin announced that it had become illegal to pay for regular products with crypto within Russia.
Then, in September, Russia announced that it would be using ‘crypto’ to pay for trade with China, although it then turned out to be the Central Bank Digital Currencies (CBDCs) of the ruble and yuan. Not really the transparent, non-fiat cryptocurrencies that you are used to in the west. Russia has also become the second largest home base for bitcoin miners, based on the origin of the hashrate.
Crypto not for circumventing sanctions
Now the Russian banking industry is also warming up to crypto, wrote the Russian newspaper Vedomosti. Rosbank has announced that it will start using crypto in international payments, according to the newspaper. This is the tenth largest bank in the country and would convert by the end of 2020 about 15 billion euros of assets.
It is not entirely clear which cryptocurrency or cryptocurrencies are involved. It could be that Rosbank will simply use the digital Russian ruble and already build the digital infrastructure for this, but this does not seem to be the case. The bank states that its larger competitors consider the volume in the market too low to use crypto. This suggests that these are volatile, open-source coins, and not the CBDC version of, for example, the ruble or the yuan.
In addition, Vedomosti writes that crypto cannot be used to circumvent sanctions against Russia. Many financial institutions would refuse to accept crypto from Russia. Trade will therefore only be possible if the country of destination has not imposed sanctions against Russia.
Last week it was also announced that Russian companies are allowed to trade on crypto exchanges within Russia, which have yet to be set up. Presumably this will be part of Rosbank’s plan.