all about cryptop referances
Russia is preparing to authorize international crypto payments, but people involved in the industry doubt that this will allow the country to circumvent sanctions. At the same time, the United States has tightened the noose, recently targeting the use of cryptocurrencies to avoid the financial restrictions imposed by the West with new legislation in Congress.
This week, Russian authorities announced that they had begun developing a mechanism for cross-border settlement of crypto-assets, with the aim of reducing sanctions pressure on the Russian economy and trade. The Finance Ministry said a bill legalizing such transactions has been agreed with Russia’s central bank.
Moscow is now in a rush to adopt rules for the issuance, circulation and various operations of digital currencies, especially payments for imports and exports limited by Western sanctions over the invasion of Ukraine. Meanwhile, the House of Representatives in the US Congress approved a new bill with measures aimed at curbing the use of cryptocurrencies to circumvent them.
Against this backdrop, experts with knowledge of the industry have shared their opinions with Russian media on how realistic it is to circumvent the sanctions using cryptocurrencies. The crypto site of the Russian business news portal RBC has collected them in an article, the title of which starts with the phrase “Great Illusion.”
The introduction of a crypto payment system under sanctions is just that, a big illusion, according to Maria Stankevich, director of development at digital asset exchange Exmo (Exmo.com). She recalled that many state-owned companies discussed this option back in 2014, amid previous sanctions imposed after the Russian annexation of Crimea.
Mikhail Zhuzhzhalov, senior attorney at Tomashevskaya & Partners law firm, agreed with the crypto boss that the idea of overcoming financial obstacles using crypto is not new. In 2018, Russian authorities considered allowing international companies established in the country’s special administrative regions to use digital coins in settlements with partners, but the proposal was rejected by regulators who had a very negative attitude at the time.
Regulatory pressure is typically exerted on institutional players such as cryptocurrency exchanges, peer-to-peer platforms, and issuers of digital and tokenized assets, Zhuzhzhalov noted. While the circulation of cryptocurrencies itself is not regulated, it is easy to go after the legal operation of licensed companies, he pointed out, stressing:
If such market participants are subject to unfriendly jurisdictions, they are obliged to comply with the sanctions. And if they are located in neutral countries, then they can be pressured by secondary sanctions, as was the case recently with Turkish banks.
Two out of five Turkish lenders working with Russia’s Mir card decided to suspend operations with the payment system widely used by Russian tourists visiting the country. The move followed clear indications earlier this month that Washington was likely to impose sanctions on nations conducting transactions with Mir. According to local media reports in Turkey, a new Turkish-Russian payment system is in the process of being created.
It is almost impossible to hide large volumes of transactions, Maria Stankevich admitted, and anyone who still wants to work with Russia using cryptocurrency will be subject to sanctions. The number who choose to continue with it will decrease, she is convinced. Tracking crypto transactions is even easier than bank transfers, Stankevich added. “Under the current conditions, you just have to accept that interaction with the West will be limited,” she concluded.
Do you think Russia will be able to reduce sanctions pressure by using cryptocurrencies for cross-border payments? Share your thoughts on the topic in the comments section below.
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