Russia Prepares to Trial Regulated Crypto Exchanges Amid Punishing Sanctions

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As an analyst with over two decades of experience in the global financial market, I find it fascinating to witness Russia’s strategic shift towards embracing cryptocurrencies as a response to international sanctions. This move, while initially met with skepticism, showcases the resilience and adaptability of the Russian economy.

As per a report from Bloomberg News, Russia is planning to test regulated cryptocurrency trading platforms and digital tokens for cross-border transactions starting September 1. This move is viewed as a strategic action aimed at addressing payment issues that Russian businesses are encountering due to international sanctions. Two sources privy to the matter have confirmed this report.

According to Bloomberg, these upcoming tests will employ Russia’s National Payment Card System to facilitate the conversion between rubles and digital currencies. Established by Russia’s central bank in 2014, this system already processes Mir cards and Russian rapid interbank transfer systems. It was chosen for the cryptocurrency exchange trials because it has an existing structure for interbank transactions and clearance, which is entirely governed by the central bank.

Bloomberg pointed out that, in July, the Russian parliament approved laws permitting cryptocurrency mining and setting up a system for testing digital tokens during cross-border transactions under central bank oversight. On August 8, President Vladimir Putin signed these bills into law. This move toward regulated crypto experiments arises as Russian companies encounter growing hurdles in making international payments to suppliers and receiving payment for exports. These obstacles have been exacerbated by the recent U.S. decision to broaden the conditions under which sanctions can be imposed on foreign banks dealing with Russia.

Notably, just in January 2022, Russia’s central bank advocated for an outright prohibition of cryptocurrencies, as reported by Bloomberg. However, the nation’s position appears to have undergone a substantial change since then. At a forum on August 14, Finance Minister Anton Siluanov stated, according to the state-run Tass news agency, that the government is actively exploring methods for legalizing crypto exchanges. Nevertheless, a definitive plan remains elusive at this point.

According to Bloomberg’s report, there may be plans set for 2022 to establish regulated crypto platforms for both the Moscow Exchange and the St. Petersburg Currency Exchange, contingent on the outcome of ongoing trials. The sources also hinted at a flexible approach to the types of cryptocurrencies that could be used during the trial phase, suggesting a wide variety of digital tokens might be considered.

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2024-08-26 21:32