According to a senior bank official, Russia’s central bank is open to using cryptocurrencies for international payments. On May 31, central bank First Deputy Governor Ksenia Yudaeva said, “in principle, we do not object to the use of cryptocurrency in international transactions.”
However, like most central banks, it does not approve of its citizens investing in, trading, or using cryptocurrencies as payments, as it views them as a threat to its financial system.
Central banks generally disapprove of decentralized digital assets because they erode their level of control over the country’s finances. Additionally, they may compete with any central bank digital currency (CBDC) projects in the pipeline. Again, this is all about control since a CBDC will give banks much more leverage over what people can and can’t do with their own money.
We Can Use Crypto, But You Can’t
Ksenia Yudaeva cited user risk over its stance on crypto for its citizens, according to a May 31 Reuters report.
“We still believe that the active use of cryptocurrency within the country, especially within Russia’s financial infrastructure, creates great risks for citizens and users. We believe that in our country those risks could be reasonably large.”
Yudaeva also commented that overall risks to financial stability in Russia as a result of Western sanctions had declined as banks now had ample foreign currency liquidity.
The Russian central bank has previously called for a blanket ban on crypto, but it sees no issues with using cryptocurrencies for itself to wriggle out of sanctions. No clear decision has been made yet regarding the status of the asset class for regular Russians as the prolonged discussions continue.
Last week, the finance ministry said that the idea of using crypto for transactions for international settlements was being actively discussed.
Conflicting Signals
Earlier this month, Russia’s Industry and Trade Minister, Denis Manturov, noted that authorities may eventually legalize crypto payments within the country “in some format or other.”
Russia is not the only nation with conflicting signals regarding crypto assets. India and Thailand also have some state departments open to crypto payments and regulations. However, their central banks also wish to impose heavy restrictions on them, mainly for the aforementioned reasons.