Russia Plans to Power Cross-Border Remittances with Crypto

Russian authorities are now thinking of planting cryptocurrencies for cross-border remittances. State Duma Financial Market Committee’s chairman Anatoly Aksakov has laid light on the possibility of these plans coming into existence by the second half of 2024. Crypto assets are alternative forms of payment tailored to serve as a medium of exchange locally or globally.

The Move Does Not Imply Russia Supporting Cryptocurrencies

Appearing in an interview with Russian newspaper Izvestia, Aksakov told them that authorities may pass the legislation by the end of Q1 2024. Moreover, he shows optimism about this plan given the active cryptocurrency market in Russia. Crypto mining, taxation, remittances, and more will fall under this regulatory umbrella.

The move is appealing to players involved in crypto activities within the nation. Their participation reflects support for benefits springing out of a regulated crypto market. Russia also aims to strengthen international trade given the low transaction cost and ease of transfer via cryptocurrencies. Additionally, the law will implement penalties for illegal use of these assets.

In April, Russian news agency TASS reported that the central bank is also working on a crypto bill that will focus on “external payments” instead of the assets’ use in the country. “We adhere to the same position that cryptocurrency <…> should not be used within the country, and for external payments we assume that this is possible as an experiment,” said Elvira Nabiullina, head of the Central Bank of the Russian Federation.

Alexei Guznov, the central bank’s deputy chairman, explained that authorities are still in altercation over which organizations the government will choose to deploy their plan through. However, this does not imply that the Bank of Russia is supporting cryptocurrencies. It noted adherence to the position that crypto assets’ circulation within Russian territory is inadmissible.

A report produced by blockchain analysis firm Chainalysis in October 2023 highlighted Russia, alongside Ukraine, saw the biggest year-on-year decrease in cryptocurrency transactions. While Russia experienced a drop of $41 Billion, Ukraine witnessed a decline of $35.8 Billion. The downfall was speculated due to the ongoing conflict between the nations since February 2022.

Following Russia’s invasion of Ukraine, Russia had less access to international cryptocurrency exchanges, impacting their funding of the war efforts through digital assets. In July 2022, news agency CNBC reported that Vladimir Putin, president of the country, penned a new law banning non-fungible tokens (NFTs) and crypto assets as a method of payment.

Just a couple of months before the ban, Denis Manturov, Russian Industry and Trade minister, expressed that sooner or later, crypto assets will be legalized in the nation. He said, “The question is, when this happens, how it will be regulated, now that the central bank and government are actively working on it.”

Regulatory stance over digital assets appeared loosening when the State Duma, the lower house of the Federal Assembly of Russia, told the Russian newspaper Vedomosti that they have begun developing draft amendments to create a “national crypto exchange.”

Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.