Russia considers legalizing international crypto payments as a way to avoid sanctions consequences.
Official Moscow still can’t decide whether the west sanctions are good or bad for them.
The state-run propaganda says the sanctions will even help to strengthen the Russian economy. But in the international area, they are looking for a way to avoid sanctions consequences.
Because of that, the crypto usage in Russia jumped all-time high last few months.
The people used digital assets to save their money as the Ruble started deflating dramatically. And the most popular crypto exchanges banned Russians who have ties with power or any other illicit activity.
Now Kremlin considers allowing international crypto payments. Would that really work?
Russia need crypto to avoid sanctions
“The idea of using digital currencies in transactions for international settlements is being actively discussed,” said Ivan Chebeskov, head of the finance ministry’s financial policy department.
The main two power to discuss the country’s crypto market regulation is the finance ministry and the central bank. The last calls for a blanket ban.
Despite the government expecting crypto to be legalized as a payment form sooner or later, there is no consensus about it yet.
Chebeskov thinks that allowing crypto as a means of settlement for international trade would help counter the impact of Western sanctions. The last restrictions significantly limited Russia’s access to traditional cross-border payment mechanisms.
Besides that, Russia has also planned to introduce its own digital rouble or central bank digital currency. However, the support for private cryptocurrency usage is still unclear.
Russian officials continue to argue that crypto could be used in money laundering or lead to finance terrorism. Meanwhile, crypto transactions by Russian accounts are about for about $5 billion a year.
That won’t help
Earlier the US government prepared for Russians to use crypto during sanctions. So they decided to tackle this problem.
In particular, Senator Elizabeth Warren announced the Digital Asset Sanctions4Compliance Enhancement Act. “The crypto industry claims that Russians can’t use crypto to hide their wealth”, she said.
The bill requires the White House to make up a report on all crypto platforms that have any affiliation with Russia. The new legislation also gives more authority to the Treasury for banning crypto services, that still process transactions with Russia-associated addresses.
Warren proposes to establish a broad definition for so-called “digital asset transaction facilitators”.
Such facilitators will be defined as “any person, or group of persons, that significantly and materially facilitates the purchase, sale, etc.”
And the Coinbase has already banned 25 000 Russian crypto wallets because of the war that Russia started against Ukraine.
Surely, it will be impossible to ban all Russians from using crypto. But at least government usage cases can be prevented.