Russia "Cross-border Payments with Virtual Currency"... Circumventing Western Sanctions

Next Year’s Plan for Large-Scale Introduction of 'Digital Ruble'
Passing of Bill to Strengthen Cryptocurrency Mining Regulations

Russia is considering a plan to bypass Western sanctions and implement cross-border payments using cryptocurrency. The plan is to conduct a pilot test within this year and introduce the digital ruble on a large scale by mid-next year.

According to Bloomberg on the 30th (local time), Elvira Nabiullina, Governor of the Central Bank of Russia, stated at the Russian Federation Council that "the first cross-border cryptocurrency payment is expected to take place by the end of this year."

On the same day, the State Duma (the lower house of the Russian parliament) passed a bill allowing cross-border payments using cryptocurrency under the regulation of the Central Bank.

Governor Nabiullina also mentioned that ministries and companies are discussing pilot cryptocurrency payment plans. She predicted that if the blockchain-based digital currency, the digital ruble, test proceeds successfully as planned, it could be introduced by July next year.

Major foreign media outlets evaluated this as opening a way for Russia, isolated from the international payment network due to the Ukraine 'special military operation,' to evade Western sanctions and ease trade difficulties.

Since launching the offensive against Ukraine in February 2022, Russia has been expelled from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) due to Western sanctions. Bloomberg explained that some Russian exporters are already using cryptocurrency for overseas payments, but currently, these transactions are conducted through third-country intermediaries.

President Vladimir Putin recently told government officials that "cryptocurrency is increasingly being used worldwide as a means of payment in national settlements."

Additionally, the Central Bank of Russia has been conducting a pilot project using the digital ruble since August last year. The digital ruble is also considered a matter Russia is rushing to introduce in response to Western sanctions on international financial transactions.

On the same day, the State Duma also passed a bill to strengthen regulations on cryptocurrency mining. The bill allows only government-registered companies to mine cryptocurrency on a large scale. The cryptocurrency international payment bill and the mining regulation bill are expected to take effect on September 1 after approval by the Federation Council and signing by President Vladimir Putin. Along with the enactment of the bills, the Central Bank of Russia will need to build new infrastructure.

This content was produced with the assistance of AI translation services.