Crypto Payments May Not Help Russia Bypass Sanctions, Experts Say – Finance Bitcoin News

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Russia is preparing to authorize international crypto payments, but people involved in the industry doubt that this would allow the country to avoid sanctions. At the same time, the United States has tightened the noose, recently targeting the use of cryptocurrencies to avoid the financial restrictions imposed by the West with new legislation in Congress.

Russian Crypto Experts Claim Bypassing Sanctions With Cryptocurrency Is A ‘Big Illusion’

This week, Russian authorities announced that they have started developing a mechanism for cross-border settlements with crypto-assets, with the aim of reducing the sanctions pressure on the Russian economy and business. The Finance Ministry said a bill legalizing such transactions had been agreed with the Central Bank of Russia.

Moscow is now rushing to adopt regulations for the issuance, circulation and various operations with digital currencies, especially payments for imports and exports restricted by Western sanctions due to its invasion of Ukraine. Meanwhile, the House of Representatives of the United States Congress approved a new bill with measures aimed at curbing the use of cryptocurrencies to avoid them.

Against this background, experts with knowledge of the industry shared with Russian media their views on how realistic it is to bypass the sanctions with the help of cryptocurrencies. The cryptic page of the Russian business news portal RBC compiled them in an article whose title begins with the expression “Great Illusion”.

The introduction of a crypto payment system under sanctions is just that, a big illusion, according to Maria Stankevich, director of development at the exchange of digital assets Exmo (Exmo.com). She reminded that many state-owned companies discussed this option as early as 2014, amid earlier sanctions adopted after Russia’s annexation of Crimea.

This is not the first time Russia has turned to cryptocurrencies for payments

Mikhail Zhuzhzhalov, a senior lawyer at the law firm Tomashevskaya & Partners, agreed with the crypto executive that the idea of ​​overcoming financial obstacles with the help of crypto is not new. In 2018, Russian authorities considered allowing international companies established in the country’s special administrative regions to use digital currencies in settlements with partners, but the proposal was rejected by regulators, who had a very negative attitude at the time.

Regulatory pressure is usually exerted on institutional players such as crypto exchanges, peer-to-peer platforms and issuers of digital and tokenized assets, Zhuzhzhalov noted. While the circulation of cryptocurrencies itself is not regulated, it is easy to go after legally operating licensed companies, he pointed out and emphasized:

If such market participants are subjects of hostile jurisdictions, they are obliged to comply with the sanctions. And if they are located in neutral countries, then they can be pressured by secondary sanctions, as recently happened with Turkish banks.

Two out of five Turkish lenders working with Russian Mir cards have decided to suspend operations with the payment system widely used by Russian tourists visiting the country. The move followed clear indications earlier this month that Washington was likely to impose sanctions on nations conducting transactions with Mir. According to information from local media in Turkey, a new Turkish-Russian payment system is being made.

It is almost impossible to hide large volumes of transactions, Maria Stankevich admitted, and everyone who still wants to work with Russia using cryptocurrencies will be put under sanctions. The number of those who choose to continue this will decrease, she is convinced. Tracking crypto transactions is even easier than bank transfers, Stankevich added. “In the current conditions, you just have to accept that interaction with the West will be limited,” she concluded.

Tags in this story

conflict, cross-border payments, Crypto, crypto industry, crypto payments, Cryptocurrencies, Cryptocurrency, Exchange, Exmo, experts, international settlements, legalization, opinions, Payments, pressure, Regulation, restrictions, Russia, Russian, Sanctions, USA, Ukraine, War

Do you think Russia will be able to reduce the pressure of sanctions by using cryptocurrencies for cross-border payments? Share your thoughts on the topic in the comments section below.

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Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes the Hitchens quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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