Bank of Russia Rejects Idea of Using Cryptocurrency to Circumvent Sanctions

Bank of Russia believes it is impossible to use cryptocurrency to bypass financial restrictions that were imposed due to the conflict in Ukraine. This is according to Ksenia Yudaeva (first Deputy governor of the central bank), who responded to a proposal from a member the State Duma, which is the lower house in Russian parliament.

Anton Gorelkin is a lawmaker representing the ruling United Russia party. He suggested that Russian entrepreneurs and companies should be permitted to pay in digital currencies. This includes for settlementswith foreign partners. In response to Western sanctions, he believes the establishment of a Russian national cryptocurrency infrastructure is inevitable.

However, officials at the central bank believe that large-scale cryptocurrency transfers by Russian companies would be impossible. Yudaeva, quoted by the RIA Novosti news agency said that regulators in the EU, U.S.A, Japan, Singapore and Japan have begun to implement preventive steps.

She said that digital asset platforms like crypto exchanges have also adopted restrictions which prohibit Russian users from accessing funds. Even though crypto payments aren’t banned in some jurisdictions, authorities are increasing the standards of compliance for crypto service providers with customer identification rules.

The Central Bank of Russia ( CBR) is a strong opponent to the legalization of cryptocurrency. The financial authority proposed banning all crypto-related activities in Russia in January. It stated that bitcoin and other decentralized digital currencies cannot be used to pay for goods or services.

The CBR’s hardline stance has led to it being isolated from other government institutions in Moscow. The federal government approved in February a regulatory plan that was based on the concept of the Finance Ministry. This plan favors strict supervision over prohibition.

The ministry presented a bill entitled “On Digital Currency” that was designed to regulate the country’s cryptocurrency market. It was submitted just days before the Russian army crossed over the Ukrainian border. Alexander Yakubovsky (Russian lawmaker) suggested in mid-March that cryptocurrencies could be used to help Russia regain its global financial access.

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