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Russian authorities reach an agreement to allow cross-border settlements with crypto

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(Kitco News) - A Thursday report from the Russia-based publication Kommersant indicates that the Bank of Russia and the country’s Ministry of Finance have reached an agreement allowing citizens to conduct cross-border settlements with cryptocurrencies. 

Russian Deputy Finance Minister Alexei Moiseev commented that the Ministry of Finance and the Central Bank have agreed “on the whole” on a bill that will let residents send cross-border payments using crypto.

“Now we have a bill in this part already agreed with the Central Bank on the whole ... It generally describes how to acquire cryptocurrency, what can be done with it, and how it can or cannot be settled with it in the first place in cross-border settlements,” the finance minister said while spreading at the XIX International Banking Forum.

These are not the first comments from the deputy finance minister on the topic of cross-border payments using crypto. On Sept. 5, Moiseev suggested that the infrastructure plan that the country was creating was “too rigid for the use of cross-border settlements,” and indicated that they would have to work on legalizing it “somehow.” 

The official stressed the need to “give people the opportunity to do it,” while also putting the activity “under control so that there is no laundering, paying for drugs, and so on.” 

According to Moiseev, citizens are already utilizing services outside of Russia to get set up and interact with cryptocurrencies, so it is in the best interests of the government to develop a way for them to legally be able to do it in Russia. 

“Now people are opening crypto wallets outside the Russian Federation. It is necessary that this can be done in Russia, that this is done by entities supervised by the Central Bank, which are required to comply with the requirements of anti-money laundering legislation, and first of all, of course, to know their client,” he explained.

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This latest development comes as the relationship between Russia and cryptocurrencies has been volatile. The country passed legislation back in 2020 that prohibited the use of Bitcoin (BTC) and other cryptocurrencies for payment, and this past July, President Vladimir Putin signed a bill into law that banned digital financial assets as payments.

On the flip side, in May of this year, trade Minister Denis Manturov suggested that Russia would legalize crypto payments “sooner or later,” and in late August, Russian Prime Minister Mikhail Mishustin declared that the adoption of digital assets is necessary as a “safe alternative” for cross-border payments during a strategic session on the development of the domestic financial system. 

Mishustin subsequently ordered the government to come to a consensus regarding cryptocurrency regulation in the country by Dec. 19, 2022. The need for Russia to adopt cryptocurrency payment capabilities has significantly increased in the face of crippling sanctions placed on the country following its invasion of Ukraine. 

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