Central Bank of Russia promotes crypto as means to ease the sanctioned economy

    09 Nov 2022

    According to a new report on its priorities, the Central Bank of Russia (CBR) is working on integrating crypto assets into the local financial system. The CBR is also working on the digital ruble, a central bank digital currency (CBDC).

    The CBR released a report on digital assets and crypto regulation, focusing on integrating them into financial systems. The main areas of concern included proper taxation and regulation of digital asset issuance, similar to crypto regulatory discussions around the world.

    Noteworthy is that the report doesn’t mention any money laundering regulations – a major focus of crypto policies in other countries – and the sanctions currently imposed on the Russian economy.

    The role of cryptocurrency in Russia and the central bank’s increasing openness to crypto technology comes as the country has tried to monetize its natural resources and move away from the US dollar, which is a powerful tool for sanctions and remains the lead currency in global oil and natural gas markets. Before invading Ukraine, President Vladimir Putin also spoke out in favor of crypto and its possibilities for the Russian economy.

    In the report, the CBR noted its interest in “opening the domestic market to foreign issuers from friendly countries.”

    “Friendly countries”” has become a euphemism in recent Russian law for the short list of nations that are not actively excising Russian entities from their markets.

    Also, the report noted that the CBR is working on a separate report focusing on the digital ruble, a central bank digital currency (CBDC) that the CBR has said it will be piloting in 2023.

    Meanwhile, the European Union said last month it tightened restrictions on Russians’ crypto investments in the EU as a response to “sham” independence votes being held in Russian-occupied regions of Ukraine. Russian citizens could be restricted from making any payments to EU crypto wallets following the limits imposed in April. All transfers from Russians to European crypto wallet providers will be forbidden.

    As a result, Dapper Labs, the company behind popular NFT collections, and crypto exchange OKX have cut off payment services for users with links to Russia, citing EU sanctions.

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