As a seasoned crypto investor with a keen eye for geopolitical trends, I find Russia’s latest move to leverage cryptocurrencies for cross-border transactions fascinating. Having navigated through market turbulences and regulatory changes over the years, I can attest that this is yet another intriguing twist in the ever-evolving world of digital assets.
Russia initiates tests to utilize cross-border cryptocurrency transactions as a means to bypass Western sanctions and tackle domestic economic issues.
Facing economic repercussions due to global sanctions, Russia plans to explore cryptocurrency as an alternative method of bypassing these barriers. Starting from September 1, it intends to conduct trial runs of cross-border cryptocurrency transactions.
At the end of July, a piece of legislation concerning the testing and nationwide deployment of cryptocurrency remittance systems was officially passed. Russian President Vladimir Putin then signed this bill into law. Although using crypto as legal tender within the country is still prohibited, this law permits cross-border transactions involving cryptocurrencies.
Trials for transactions will be conducted using Russia’s National Payment Card System (NPCS), which manages interbank settlements in rubles, its national currency. Now, it is intended to allow for the conversion of cryptocurrencies into rubles and vice versa as Russia aims to persuade international business partners to utilize this system for transactions with the country. The Central Bank of Russia will oversee this process.
As a Russian crypto investor, I’m finding the ongoing sanctions challenging, especially when it comes to settling transactions with suppliers in jurisdictions like the US, EU, and others. Many Russian banks are currently excluded from using SWIFT for global remittances, which is causing significant financial strain. However, a new crypto-compatible network might provide a solution to this problem, although it’s likely to involve a lot of experimentation and potential setbacks. As Finance Minister Anton Siluanov stated earlier this month, “We haven’t found a perfect solution yet on how to navigate this situation.”
As a crypto investor, I’ve come to realize that with this new legislation, the central bank wields significant control over the course of these trials, able to modify the proceedings whenever they deem necessary. Moreover, they retain the authority to omit or alter certain aspects of the law as the trials unfold.
The West Will Proactively Introduce Secondary Sanctions
Nonetheless, using crypto to evade transactions may not be an easy feat. The West will look to impose secondary sanctions to stop cross-border crypto remittances between Russian and international businesses. Crypto transactions can be tracked on-chain, so Western governments will address sanctions bypasses using these assets in other ways.
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2024-09-01 09:47