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Russian Central Bank ‘Turning Blind Eye’ to Crypto-powered Trade

Russian Central Bank ‘Turning Blind Eye’ to Crypto-powered Trade

Tim AlperTim Alper

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| 2 min read

Metal tokens intended to represent Bitcoin against the background of the Kremlin in Moscow, Russia.Metal tokens intended to represent Bitcoin against the background of the Kremlin in Moscow, Russia.
Source: ulchik74/Adobe

A Russian senator has claimed the nation’s Central Bank is “turning a blind eye” to firms that use crypto as a payment tool in international trade.

Russia’s CoinSpot quoted Ivan Abramov, the First Deputy Chairman of the Federation Council Committee on Economic Policy, as calling for regulation. Abramov told reporters:

“Cryptocurrency is […] being used in [cross-border] settlements, but the Central Bank pretends that it has no knowledge of such transactions. It would be better to regulate [the crypto sector] and set out certain rules for [the industry].”

Mainstream Russian media outlets such as Izvestia have reported a rise in smaller domestic importers and exporters turning to fiat-pegged stablecoins as payment tools.

Reports claim that Russian traders are now using cryptoassets “in parallel” with overseas currencies such as the Emirati dirham and the Chinese yuan.

After being frozen out of USD-powered trade by United States and EU sanctions, many Russian firms have turned to crypto-powered alternatives.

Moscow also hopes to launch experimental CBDC-powered trade projects this year. The government hopes to use the digital ruble to trade with Beijing and other partners.

‘More Russian Trade Firms Now Turning to Crypto’

Abramov claimed there had been a “significant increase” in the use of crypto in Russia in “recent years.”

And he called on fellow lawmakers to adopt a comprehensive framework of crypto regulation “by the end of 2024.”

However, some feel that while smaller companies are embracing crypto pay, bigger Russian firms will shun tokens in favor of fiat.

Speaking to the radio station Vesti FM, Mikhail Burmistrov, the head of the B2B consultancy Infoline-Analitika, said “bigger” Russian firms would steer clear of crypto. Burmistrov said:

“Making settlements in cryptocurrency is certainly possible [for domestic players]. But this is very far from becoming a legal reality in Russia.”

Burmistrov added that “we can talk about some [smaller] parties here.” But he said “larger players will not actively use” crypto as a payment tool.

What Is the Russian Central Bank’s Stance on Crypto?

The Central Bank remains opposed to the use of crypto in the “domestic economy” and even wants to force industrial miners to sell their coins overseas.

The bank is headed by the long-serving Elvira Nabiullina, an arch-crypto skeptic and a close ally of President Vladimir Putin.

Nabiullina has previously said the bank wants to create an “experimental sandbox” for Russian firms who want to use crypto in settlements.

But a top MP last year claimed that Russian firms are not waiting for regulators to act.

Anatoly Aksakov, the Chair of the State Duma Committee on the Financial Markets, said domestic firms were “already” doing overseas business in crypto. Aksakov stated in June 2023:

“[Big Russian companies are saying: ‘We don’t even need a law [to carry out crypto transaction-powered business]. We know we are working within the existing legal framework and are not afraid of the consequences.’”

The Central Bank, meanwhile, wants to fast-track its digital ruble project. The bank hopes that the CBDC will provide an alternative to dollar- and crypto-powered business and trade – and is eyeing a 2025 rollout.

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