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Russia considers allowing cryptocurrency for international payments as sanctions over Ukraine bite

As Western sanctions begin to bite, Russia is considering allowing crypto for international payments.
As Western sanctions begin to bite, Russia is considering allowing crypto for international payments.   -   Copyright  Canva
By Euronews, Reuters

Russia is considering allowing cryptocurrency to be used for international payments, Interfax news agency quoted a government official saying on Friday.

"The idea of using digital currencies in transactions for international settlements is being actively discussed," Ivan Chebeskov, head of the finance ministry's financial policy department, was quoted as saying.

Russian officials are wrestling with how to regulate the country's crypto market and use of digital currencies, with the finance ministry opposed to the central bank's calls for a blanket ban.

Discussions have been ongoing for months and though the government expects cryptocurrencies to be legalised as a means of payment sooner or later, no consensus has yet been reached.

The finance ministry is discussing adding the latest proposal on international payments to an updated version of a draft law, the Vedomosti newspaper reported on Friday, citing government officials.

Allowing crypto as a means of settlement for international trade would help counter the impact of Western sanctions, which has seen Russia's access to traditional cross-border payment mechanisms "limited," Chebeskov said.

Russia has advanced plans to issue its own digital rouble. However, the government has only recently come round to supporting the use of private cryptocurrencies. For years Russian officials have argued that crypto could be used in money laundering or lead to finance terrorism.

According to a report released earlier this month, Central Bank Governor Elvira Nabiullina previously said the bank cannot welcome investments in cryptocurrencies and proposed banning trading and mining. Crypto transactions by Russians account for about $5 billion (€4.76 billion) a year.

Other central bank officials said last year they do not see room for cryptocurrency to be used in Russia's economy, citing the risks to financial instability from the rising number of crypto transactions.