Russia is set to launch trials of cryptocurrency exchanges and digital tokens for cross-border transactions starting September 1. This move aims to alleviate the payment difficulties faced by Russian companies due to international sanctions.
Launch of Trials
The trials will utilize the National Payment Card System to facilitate the exchange between rubles and cryptocurrencies. In July, Russia's parliament passed legislation that legalizes crypto mining and establishes a framework for testing digital tokens under the supervision of the central bank. On August 8, President Vladimir Putin signed these bills into law.
Central Bank and Payment Card System
The National Payment Card System, created in 2014, has been selected for these trials. The system currently operates Mir cards and instant interbank payment systems. Its existing infrastructure for functions like interbank settlement and clearing makes it a suitable platform for this experiment. Despite the move towards legalizing crypto exchanges, Russian authorities have not yet finalized how to fully integrate these platforms. Finance Minister Anton Siluanov stated on August 14 that authorities are still exploring the best ways to legalize cryptocurrency exchanges.
Future of Crypto Platforms
The ongoing trials may lead to the establishment of crypto platforms by the Moscow and St. Petersburg Currency Exchanges next year, depending on the success of the initial tests. The experiment with cryptocurrencies marks a significant shift from the central bank's position in early 2022, when it proposed a blanket ban on the use and creation of cryptocurrencies. Now, as Russia faces growing obstacles in its global financial operations, these trials could provide an essential alternative for cross-border transactions.
Russia's upcoming trials of cryptocurrency exchanges for cross-border payments reflect a strategic response to the financial constraints imposed by international sanctions. With the legal framework now in place and the central bank's infrastructure ready, these trials could pave the way for broader adoption of digital currencies in Russia's international trade, depending on their success.
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