- Russia will start cryptocurrency exchange trials on September 1, Bloomberg reported.
- The nation is look for new ways to transact payments amid sanctions.
Russia, home to anti-crypto legislation, plans on testing digital assets as a way to break away from Western sanctions, Bloomberg reported.
Moscow will initiate cryptocurrency exchange trials as soon as September 1, anonymous sources told the outlet. The intention is to ease payment difficulties for Russian exporters, caused by restrictions related to Moscow's war in Ukraine.
Sources said the National Payment Card System will be used to swap between rubles and cryptocurrencies in these trials. The network was chosen due to its preexisting functions, such as an interbank settlement and clearing feature, and its full regulation by the central bank.
If successful, this experiment could eventually provide Russia with an alternative payment method for cross-border transactions. Payment issues have made it difficult to buy foreign supplies and have left exporters struggling to get reimbursed.
This became problematic in June, when the new US sanctions started targeting Russia-friendly foreign lenders. Given that global institutions rely on access to the dollar, the threat of secondary sanctions forced many to cut off ties with Moscow.
For instance, most Chinese banks have since halted yuan payments to Russia despite the yuan's prominent role in Russia's current-day economy. Meanwhile, Moscow can't rely on Western currencies such as the dollar, after the country lost access to the SWIFT international banking system.
Moscow's possible embrace of digital currencies is a significant retreat from its usual attitude: Russia has spent years arguing against crypto and has proposed a blanket ban in 2022. Even if crypto is adopted in international payments, its use inside the country remains restricted.
The legal turnaround came on August 8th, when President Vladimir Putin legalized the creation of a cross-border crypto framework. Additionally, he signed into law a bill allowing from crypto mining in the country.
Eventually, Russia may permit the Moscow Exchange and St. Petersburg Currency Exchange to creat crypto platforms next year, sources told Bloomberg. As to traditional crypto exchanges, Finance Minister Anton Siluanov acknowledged that this looks less likely:
"We haven't found a solution yet on how to do this," he said at a forum on August 14th, quoted by the state-run Tass new agency.