Russia has been negotiating with international crypto payment authorizations, though industry professionals doubt it will allow Russia to avoid sanctions. The United States is tightening its grip on the situation, and recently targeted cryptocurrency use to circumvent financial restraints imposed by West. This was done through new legislation passed in Congress.
Russian Crypto Experts Claim Circumventing Sanctions With Cryptocurrency Is a ‘Great Illusion’
Russian authorities have announced that they are working on a cross-border mechanism to settle disputes with crypto assets. This is in an effort to lower sanctions against Russia’s economy and trade. According to the Ministry of Finance, a bill allowing such transactions was approved by the Central Bank of Russia.
Moscow has been rushing to approve regulations regarding the circulation and issuance of digital currency, including payments for imports or exports that are restricted due to Western sanctions. The House of Representatives of U.S. Congress passed a new bill to limit the abuse of crypto currencies.
Russian media have been able to hear from experts in the sector about whether it’s possible to avoid sanctions by using cryptocurrency. The crypto page of the Russian business news portal RBC has compiled them in an article, the title of which starts with the expression “Great Illusion.”
Maria Stankevich is the director of development for Exmo, which offers digital assets. She says it’s a big lie that a cryptocurrency payment system could be introduced under existing sanctions. In light of earlier Russian sanctions, she reminded us that state-owned firms had already been discussing the possibility back in 2014.
This Isn’t the First Time Russia Turns Toward Cryptocurrencies for Payments
Mikhail Zhuzhzhalov, a senior lawyer at the Tomashevskaya & Partners law firm, agreed with the crypto executive that the idea of overcoming financial obstacles with the help of crypto is not new. In 2018, Russian authorities considered permitting 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.
Zhuzhzhalov stated that regulators often apply pressure to institutions such as exchanges for cryptocurrency, peer-to–peer platforms and issuers digital or tokenized assets. He stressed that while cryptocurrency is not subject to regulation, the legal operation of licensed businesses can easily be pursued.
They are required to adhere to the sanctions if such market participants fall within unfriendly countries. Secondary sanctions may also be applied to those who are not located in hostile countries. As was the case for Turkish banks recently.
Two of five Turkish lenders working with Russia’s Mir cards decided to suspend operations with the payment system widely used by Russian tourists visiting the country. This decision was made in response to Washington’s indications that it would likely impose sanctions against nations who transact with Mir. Local media in Turkey reported that a new Turkish Russian payment system was in development.
It’s almost impossible to hide large volumes of transactions, Maria Stankevich admitted, and everyone who still wants to work with Russia using cryptocurrencies will be placed under sanctions. She is certain that the number of people who continue doing this will drop. Stankevich said that tracking crypto transactions was easier than banking transfers. “In the current conditions, you just have to accept that interaction with the West will be limited,” she concluded.
Is Russia able to lower sanctions? Do you believe Russia will use cryptocurrencies for cross border payments? Comment below to share your views.
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