With limited access to global finances, Russian businesses have begun settling in cryptocurrency with their partners abroad. Although these are still small-scale payments, government officials have noted their increase, which comes even before authorities have decided how to regulate these transactions.
Cross-Border Crypto Settlements on the Rise in Russia as US Dollar and Euro Payments Decline
Companies operating under sanctions imposed on Russia over the escalating conflict in Ukraine have started employing cryptocurrencies despite that the new regulations for this type of payment are expected to come into force in 2023 at the earliest, a government representative has revealed.
Director of the Financial Policy Department at the Ministry of Finance Ivan Chebeskov acknowledged the trend in conversation with the Russian daily Izvestia. At the same time, he remarked that such cross-border settlements are still carried out on a limited scale.
Russian entities are now actively using digital payment instruments, including cryptocurrencies, agreed Vladimir Gamza, head of industrial, financial and investment policy at the Council of the Chamber of Commerce and Industry of the Russian Federation.
Gamza also told the newspaper that due to the financial restrictions, payments in U.S. dollars, euros, and other fiat currencies have decreased to a minimum. As part of the measures adopted in response to Russia’s invasion, Russian banks were cut off from SWIFT, the global payment messaging system.
The executive further elaborated that digital coins are now mainly utilized in settlements with what he referred to as “unfriendly countries,” primarily for Russian exports and in payments for import components for the manufacturing sector.
Cryptocurrencies are also used to pay for the import of consumer goods. Against the backdrop of sanctions, the volume of cross-border transactions in crypto could potentially see a several-fold increase, Vladimir Gamza predicted.
It’s important to try all alternatives to the SWIFT payments, Ivan Chebeskov was quoted by RBC Crypto as saying earlier this week. He also unveiled that the Finance Ministry and the Central Bank of Russia intend to allow international crypto payments for any industry, without restrictions.
Throughout the year, Russian authorities have been mulling over how to regulate the country’s crypto space and sanctions have convinced them they need to legalize at least cross-border payments with cryptocurrencies. In September, the head of the parliamentary Financial Market Committee Anatoly Aksakov indicated that Russian businesses may be permitted to choose which coin they want to use.