Despite the Russian government’s expectation that cryptocurrencies will be legalized as a form of payment, no consensus has yet been reached after months of panel discussions in Moscow about crypto.

Nonetheless, Russia is contemplating the use of cryptocurrency for international payments in an effort to mitigate the effects of western sanctions imposed in response to the country’s invasion of Ukraine.

According to various sources, Ivan Chebeskov, the head of the Financial Policy Division within the Ministry of Finance, is actively evaluating the prospect of incorporating crypto payments.

Chebeskov stated that the concept of employing digital currency in foreign transactions is being actively discussed.

Suggested Reading | Paraguay Approves Crypto Regulation Bill Via 40-12 Vote

Russia Feels The Pinch Of Sanctions

Sanctions are restrictions imposed by one nation on another to prevent the latter from engaging in aggressive behavior or violating international law. They are among the harshest measures a nation can take.

Western countries have imposed broader sanctions against Russia, targeting, among other things, banks, individuals, businesses, and key government-controlled and owned industries.

The assets of Russia’s central bank have been frozen to prevent the country from accessing its $630 billion in foreign currency reserves.

Russia is thinking about using cryptocurrency to make international payments as a way to lessen the effects of western sanctions that were put in place after the country invaded Ukraine. (The Times)

The finance ministry has rejected the central bank’s calls for a blanket ban on cryptocurrencies. The legalization of the asset class looks to have widespread support among the Russian administration.

All these have been detrimental to Russia’s economy as it deals with an ongoing problem of its own making — Ukraine.

‘Sooner Than Later’

According to Moscow’s commerce minister Denis Manturov, cryptocurrencies will be legalized “sooner rather than later.” In April, authorities from the finance ministry announced their plan to legalize a draft resolution entitled “On Digital Currency.”

While the government has crypto on its crosshair as a means of payments, the finance ministry and central bank must agree on how to regulate the cryptocurrency market.

Crypto total market cap at $1.24 trillion on the daily chart | Source: TradingView.com

Discussions have been undertaken in the last few weeks, but so far they are still facing a blank wall.

Chebeskov pointed out that enabling crypto as a form of settlement for international trade will help ease the blow from Western sanctions, which have “restricted” Russia’s access to traditional cross-border payments.

Russian Currency Losing Value

In a related development, the rouble has lost 22 percent of its value, resulting in a 15 percent increase in Russia’s inflation rate and a surge in the cost of imported commodities.

Meanwhile, Elvira Nabiullina, the head of Russia’s central bank, revealed in April that cryptocurrencies are at the top of the list for mitigating the negative impacts of Western sanctions on the country’s economy.

Suggested Reading | Crypto Scam Victims Can Recover Their Funds With MetaMask, Asset Reality Mechanism

Featured image from Blogtuan.info, chart from TradingView.com