December 4, 2022

Russia to Allow Cryptocurrency as a Form of Payment

Russia will soon approve the use of virtual currencies. The country announced on Thursday Russians are at liberty to purchase goods and services with cryptocurrencies as a form of payment.

Cryptocurrency has been widely discussed in the Russian Parliament since January 2021. It became a major topic of discussion this year as an alternative to fiat after being sanctioned following its invasion of Ukraine.

Moscow Takes a New Step in Adopting Cryptocurrencies

Although crypto has been legal, it wasn’t used as a form of payment for goods. Russia even enacted a law that limited crypto use for payments. Fast forward to 2022, Russia has made a u-turn and is proposing the legalization of virtual currencies for payment.

Russian Minister of Trade Denis Manturov confirmed the legalization of virtual currency payment. The minister also said that the Bank of Russia had made some progress in its quest to develop a CBDC

Recently, Governor Elvira Nabiullina said it would not accept crypto investments, despite the popularity of virtual assets in the nation. However, this could change soon with the government’s new stance on digital assets. 

Before Russia invaded Ukraine, the Finance Ministry suggested some crypto measures against CB,s proposals. Russian crypto transactions amount to nearly $5 billion annually. 

Regulating the Industry

Recently, Manturov was asked about his opinion on virtual currencies and if they would serve as a form of payment. The minister responded that regulating the industry was more important. 

“When digital assets become part of the monetary system, how it will be regulated will determine its success,” he said. Manturov thinks that soon, the government will implement laws guiding cryptocurrencies. 

Russian banks aren’t totally against the use of digital tokens, as popular opinions hold. In 2020, the central bank permitted banks to develop crypto exchanges and mint new tokens under strict supervision. It shows that Russia is receptive to crypto-assets compared to popular opinions.

Russia will soon launch its CBDC, the e-Rouble. However, it has cited delays in the project due to some circumstances – one of them which is the invasion of Ukraine. Moscow recently backed private virtual currencies after years of debate that they could finance terrorism.

Last year, Russian officials said cryptos had no place in the country’s financial space, citing irregularities, volatility, and poor regulations as stumbling blocks.