Russia is allegedly considering allowing cryptocurrency to be used for cross-border payments as one of the possible survival tactics as the nation continues to face Western sanctions over its invasion of Ukraine.
According to a report from Reuters quoting the Interfax news agency, “the notion of employing digital currencies in transactions for foreign settlements is being actively considered.” Ivan Chebeskov, head of the finance ministry’s financial policy department, was cited as saying.
Several Russian officials have acknowledged that cryptocurrencies would be legalised sooner or later, as the country’s ability to conduct international transactions has been significantly hampered since it was cut off from the SWIFT system. In the face of broad sanctions, Mastercard and Visa have also turned their backs on the country.
While many people think of cryptocurrency as a financial instrument that may free people from repressive governments, Russia’s capacity to use it is limited. This is partly because the bulk of exchanges no longer allow transactions with Russia. In fact, Exmo, a cryptocurrency exchange, announced intentions to sell its stakes in Russia, Belarus, and Kazakhstan in order to avoid being harmed by the escalating sanctions.
The wallet addresses of prominent politicians and business moguls associated with Russian President Vladimir Putin have been banned. Plans to use Bitcoin for cross-border transactions will be accompanied by a model that will allow the Russian government, people, and enterprises to interact with the rest of the world economically.
However, there must first be a huge ground shift between the Ministry of Finance and the Russian Central Bank (CBR). The latter has urged for a blanket ban on digital assets, while the former opposes such a restriction. In order for Russia to profit from the advantages of crypto and the technology that powers it, multiple governmental institutions must collaborate in order to assist Russia recover from its economic crisis.