The Russian Central Bank has rejected a proposal to allow the use of digital currencies for sanctions evasion. The monetary authority believes that this is unlikely to happen because Western regulators are already taking steps to prevent such transactions.
The Bank of Russia believes that using cryptocurrencies to circumvent financial restrictions imposed as a result of the military conflict in Ukraine is impossible. According to a statement issued by the central bank’s First Deputy Governor Ksenia Yudaeva in response to a proposal by a member of Russia’s State Duma, the lower house of parliament.
Anton Gorelkin, a lawmaker from the ruling United Russia party, proposed that Russian companies and individuals be permitted to make payments in digital currencies, including for settlements with foreign partners. He believes that the establishment of a Russian national crypto infrastructure in response to Western sanctions is unavoidable.
However, central bank officials are convinced that large-scale cryptocurrency transfers by Russian businesses are not feasible. As per the report, Yudaeva stated that regulatory authorities in the EU, US, UK, Japan, and Singapore have begun to implement preventive measures.
Ksenia Yudaeva, the deputy governor of CBR went on to say that digital asset platforms, such as cryptocurrency exchanges, are enacting restrictions that amount to denying Russian users access to funds. Even in jurisdictions where crypto payments are not currently prohibited, authorities are raising the bar for crypto service providers in terms of compliance with customer identification rules.
The Central Bank of Russia (CBR) remains a staunch opponent of cryptocurrency legalisation. The country’s financial authority proposed a blanket ban on crypto-related operations in January. It insists that decentralised digital currencies such as bitcoin cannot be used to pay for goods and services.
Days before the Russian army crossed the Ukrainian border, the Ministry of Finance introduced a new bill titled “On Digital Currency,” which aims to comprehensively regulate the country’s crypto market. Alexander Yakubovsky, another Russian lawmaker working on the upcoming crypto regulations, suggested in mid-March that cryptocurrencies could help Russia regain access to global finance.
