Russia Pressed to Legalize Cryptocurrency For International Payments Post Ukraine Invasion 2022 | REC Develops Sandbox For Fintechs

the Russian Central Bank has repeatedly proposed a ban on cryptocurrency trading, mining, and payment for goods and services. It has claimed that cryptocurrencies are extremely risky with the potential to sabotage the financial well-being of ordinary Russians. The bill couldn’t be passed as The Finance Ministry of Russia did not stand for the motion. Despite Vladimir Putin’s attempts at arriving at a swift conclusion, the Russian authorities still remained indecisive. Until now.

The Russian government is now considering the use of cryptocurrencies for international payments. There are reports that a state-run organization is developing a sandbox to identify challenges when using digital assets for settlements. It comes after the Central Bank of Russia softened its stance on crypto payments, especially when they facilitate the country’s foreign trade. As a result of Russia’s ongoing conflict with Ukraine, it is currently the target of a slew of trade sanctions from Western nations.

REC Director Veronika Nikishina the need for a digital sandbox for cross border payments

The Russian Export Center (REC) is considering using cryptocurrencies for cross-border transactions to bypass the current sanctions. TASS reported that REC is creating a digital sandbox to allow fintech firms to accept payments based on digital financial instruments on behalf of the country’s exporters and importers. REC director Veronika Nikishina said at the St. Petersburg International Economic Forum, “As a development institution that captures all current trends, we are now closely studying the possibility of becoming a digital sandbox to pilot the use of cryptocurrencies in cross-border payments.”

REC is closely working with the Central Bank of Russia and the nation’s financial watchdog Rosfinmonitoring on the project, Nikitina said. A number of fintech companies and regulatory bodies have already attended. Nikishina believes that once the sandbox identifies all possible risks in terms of regulation and technology, it would allow for faster and safer payments in the future. Due to all the Western sanctions, the Central Bank of Russia has softened its stance on crypto payments, since it is considered a feasible mode of payment in cross-border transactions.