Bank of Russia open to the use of cryptocurrencies

Yesterday I wrote about BTC and ETH ETFs being created in Hong Kong. Now it turns out that another BRICS country is becoming interested in cryptocurrencies – although at a different level. The Bank of Russia wants to use digital assets in cross-border trade.

The Bank of Russia wants to pay with cryptocurrencies?

There has been a long-standing debate in Russia about what to do with cryptocurrencies. There are many indications that they will not be banned. However, they cannot be used to pay within the country. Using them in international trade is another matter.

In March 2022, the chairman of the State Duma's energy committee, Pavel Zavalny, admitted that his country could be very liberal about what currency is used in international exchange. Especially when it comes to gas sales.

As for our “friendly” countries, such as China or Turkey, which do not put pressure on us, we have been offering them payments in national currencies such as the ruble and yuan for some time. In the case of Turkey, these may be liras and rubles. So there can be many different currencies and this is standard practice. If they want bitcoin, we will trade bitcoin

– he said.

Now the topic returns. Elvira Nabiullina, president of the Bank of Russia, admitted that the institution she manages wants to test the use of cryptocurrencies in international settlements. However, everything is to be done within regulatory sandboxes, which will help the authorities check whether such a system will work.

CBDCs are a priority

However, we are still dealing with a barrel of tar to which a spoonful of honey has been added. The central bank's digital currency will be the priority. The deputy governor of the central bank, Olga Skorobogatova, told the media that the Bank of Russia “has already received three applications from companies interested in trying this solution,” i.e. CBDC payments in international trade.

In addition, cryptocurrencies are still prohibited as internal means of payment. They cannot be used to pay for goods on the country's internal market.

However, it may turn out that the BRICS bloc will need digital currencies. The way they work makes it difficult to introduce sanctions. A country that switches to international trade in BTC does not have to worry about being cut off from the SWIFT system.