Russia will begin trials for using cryptocurrencies to facilitate cross-border transactions starting September 1. The move is seen as a response to Western sanctions.
Leveraging the National Payment Card System
The National Payment Card System (NPCS), established in 2014, will be used for these trials. The platform already handles domestic interbank payments and operates the Mir payment cards. NPCS was chosen for its robust infrastructure and regulatory compliance, making it ideal for experimenting with digital currencies. The central bank is fully regulating the experiment to ensure it adheres to national financial policies.
The Legislative Framework
These trials follow a series of legislative changes in Russia aimed at integrating cryptocurrencies into the national economy. In July 2024, the Russian parliament passed two key bills that lay the groundwork for the use of digital assets in international trade. One of the bills legalizes the use of cryptocurrencies for cross-border payments, while the other authorizes specific institutions to mine crypto. These laws were signed by Russian President Vladimir Putin on August 8.
Next Steps
If successful, crypto trading platforms may be established on the Moscow and St. Petersburg Currency Exchanges as early as next year. These platforms would allow for the exchange of rubles and cryptocurrencies in a regulated environment. Full integration, however, will face hurdles as traditional cryptocurrency exchanges, operating outside of government control, present a different set of challenges. Finance Minister Anton Siluanov mentioned that while Russia is open to exploring digital assets, they are cautious about embracing unregulated platforms.
Russia's trials of cryptocurrencies for international transactions, aimed at circumventing Western sanctions, will take place on the NPCS. If successful, regulated crypto exchanges may be established in the future.
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