The Russian Central Bank has rejected a plan to allow the use of crypto to circumvent sanctions. This, according to the monetary authority, is unlikely to happen because Western regulators are already taking steps to prohibit such transactions.
The Bank of Russia believes that using cryptocurrency to get over financial limitations imposed as a result of the military crisis in Ukraine is impossible. That’s according to a statement published by the central bank’s First Deputy Governor, Ksenia Yudaeva, in response to a proposal by a member of the Russian parliament’s lower house, the State Duma.
According to Anton Gorelkin, a legislator from the ruling United Russia party, Russian enterprises and private entrepreneurs should be permitted to make payments in digital currencies, including for settlements with overseas partners. He believes that the construction of a Russian national crypto infrastructure in reaction to Western sanctions is unavoidable.
Officials from the central bank, on the other hand, are persuaded that large-scale cryptocurrency transfers by Russian enterprises are impossible. According to the Russian news agency RIA Novosti, Yudaeva stated that regulatory authorities in the EU, the United States, the United Kingdom, Japan, and Singapore have begun to implement precautionary steps.
She went on to say that digital asset companies, such as cryptocurrency exchanges, are enacting limitations that effectively deny Russian users access to their cash. Even in places where crypto payments are not yet prohibited, authorities are imposing increasingly stringent client identification requirements on crypto service providers.
The Russian Central Bank (CBR) is a staunch opponent of cryptocurrency legalization. The banking regulator proposed a total ban on crypto-related operations in the country in January. It claims that decentralized digital currencies such as bitcoin can’t be utilized to pay for goods or services.
The CBR has been isolated among Moscow’s government institutions due to its strong position on the issue. The federal government approved a regulatory plan in February based on a concept developed by the Finance Ministry, which prefers regulation under strong control over prohibition.
The ministry submitted a new bill “On Digital Currency” days before the Russian army breached the Ukrainian border, aimed at completely regulating the country’s crypto sector. Alexander Yakubovsky, a Russian senator working on impending crypto laws, indicated in mid-March that cryptocurrency could help Russia regain access to global banking.