Russia’s central bank plans to create new institutions to mine crypto assets and settle international payments.
Russia is taking additional ways to mitigate global sanctions in location since the invasion of Ukraine in 2022. According to local media reports, the country’s central bank plans to create new institutions to mine crypto assets and settle transnational payments.
In a meeting in the State Duma — one of the chambers of the Russian parliament — the head of the central bank, Elvira Nabiullina, published that the Bank of Russia would permit cryptocurrency to be used in external settlements in a pilot program. The move, still, doesn't signal a change in the country's crypto environment.
“ We adhere to the equal position that within the country, cryptocurrency […] shouldn't be used, and for external settlements, we assume that this is possible in the form of experimentation. This bill is similarly being prepared in the form of an experimental legal regime, ” Nabiullina said, according to a translated summary of the report.
The plan includes the creation of “specially authorized organizations ” for crypto mining and international settlements including deals involving cryptocurrencies and different digital assets, stated Nabiullina, a former economic adviser to Russian President Vladimir Putin.
Bank of Russia deputy chairman Aleksey Guznov described journalists that the bank is arranging with the government on how the companies will operate. “ presently, a discussion is underway with the government so that their scope of activity is clear," Guznov said, adding that private companies may be able to contribute to those initiatives in the future.
Gabby Kusz, CEO of the Global Digital Asset & Cryptocurrency Association, told that Russia, China, and other countries are realizing “Crypto is not a new financial product, but an evolution or fundamental change in the way individuals and organizations exchange value.”
She similarly highlighted that this movement would potentially impact the global financial system, including the United States ’ relevance to the future of finance in the digital era.
“Overly aggressive actions that drive crypto innovation, blockchain technology and entrepreneurs offshore only lessen the ability of the United States to lead geopolitically and from the standpoint of monetary policy.”
This development comes after recent revelations that BRICS members — Brazil, Russia, India, China, and South Africa — are working out on creating their own currency to facilitate trade. Mark Lurie, CEO of DeFi software company Shipyard, told that commodities-backed currencies used for settlements similar to the ones planned by BRICS countries aren't intended to replace the United States dollar dominance.
" While investors are increasingly distrustful of the Fed, neither investors nor the BRICS themselves will necessarily trust the Russia-led governing body of such a currency not to devalue itself. [...] Ultimately, it's not faith but relative trust that matters most," told Lurie.
(ANA PAULA PEREIRA, Cointelegraph, 2023)