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

A Russian senator, Ivan Abramov, has raised concerns about the nation’s Central Bank allegedly ignoring the use of cryptocurrencies as a payment method in international trade. According to Russia’s CoinSpot, Abramov, who serves as the First Deputy Chairman of the Federation Council Committee on Economic Policy, has called for regulatory measures to address this issue. He expressed his perspective to reporters, stating:

“It’s clear that 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 establish specific rules for the industry.”

Reports from mainstream Russian media outlets, like Izvestia, have highlighted a growing trend among smaller domestic importers and exporters in Russia who are increasingly turning to fiat-pegged stablecoins as payment tools in international trade. This suggests a growing need for regulatory clarity in the country’s cryptocurrency sector.

Reports indicate that Russian traders are increasingly utilizing cryptoassets alongside foreign currencies like the Emirati dirham and the Chinese yuan. This shift comes as a response to the restrictions imposed on USD-powered trade due to sanctions imposed by the United States and the European Union, leading many Russian businesses to explore cryptocurrency-based alternatives.

Additionally, Moscow is actively exploring the potential of launching experimental Central Bank Digital Currency (CBDC)-powered trade projects in the coming year. The Russian government aims to leverage the digital ruble for trade purposes, particularly with partners like Beijing and others. This initiative reflects the growing interest in using CBDCs for international trade and economic cooperation.

‘More Russian Trade Firms Now Turning to Crypto’

Ivan Abramov has noted a “significant increase” in the use of cryptocurrencies in Russia over recent years. He has urged fellow lawmakers to establish a comprehensive framework for cryptocurrency regulation by the end of 2024.

However, not everyone shares the same perspective. Mikhail Burmistrov, the head of B2B consultancy Infoline-Analitika, believes that while smaller companies in Russia may be adopting cryptocurrency payments, larger Russian firms are likely to continue favoring fiat currencies. Speaking to the radio station Vesti FM, Burmistrov expressed his view that making settlements in cryptocurrency is feasible for domestic players, but it is still a long way from becoming a legal reality in Russia. He suggested that smaller entities might experiment with cryptocurrencies, but larger players are unlikely to actively embrace crypto as a payment method.

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

The Central Bank of Russia continues to maintain its opposition to the use of cryptocurrencies in the domestic economy and has even proposed that industrial miners be compelled to sell their coins internationally.

The bank is led by Elvira Nabiullina, a long-serving figure who remains skeptical about cryptocurrencies and is considered a close ally of President Vladimir Putin.

Although Nabiullina has previously mentioned the possibility of creating an “experimental sandbox” for Russian firms interested in using cryptocurrencies for settlements, there is a disconnect between regulatory intentions and the actions of some Russian businesses. Anatoly Aksakov, the Chair of the State Duma Committee on the Financial Markets, stated in June 2023 that some prominent Russian companies were already conducting overseas transactions using cryptocurrencies, asserting that they did not need new laws and believed they were operating within the existing legal framework.

The Central Bank is actively pursuing its digital ruble project with the aim of providing an alternative to dollar- and cryptocurrency-powered business and trade. They are targeting a rollout of the Central Bank Digital Currency (CBDC) by 2025 as part of this effort.

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Cryptocurrency is essentially virtual money that operates in a decentralized manner, not through a bank but directly on multiple independent computers.

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