Bank of Russia Rejects Cryptocurrency to Circumvent Sanctions

The Central Bank of Russia rejected a proposal to allow digital currencies to be used for sanctions evasion. This is not an option, as Western regulators have already taken steps to stop such transactions.

Central Bank of Russia says that it is not possible to use Bitcoin to evade 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 allowed to pay in digital currencies for settlements with foreign partners. In response to West-imposed sanctions, he believes that the Russian establishment of a national crypto infrastructure is necessary.

However, officials at the central bank believe that large sums of money could not be transferred in cryptocurrency by Russian companies. Yudaeva, quoted by the RIA Novosti news Agency, stated that regulators in the EU, U.K. and Japan have begun to take preventive measures.

She said that digital asset platforms like crypto exchanges have also adopted restrictions to prevent Russian users from accessing funds. Even in countries where crypto payments are not currently banned, authorities are increasing the standards for crypto service providers to ensure compliance with customer identification rules.

The Central Bank of Russia (CBR), remains a staunch opponent of legalizing cryptocurrencies. The financial authority proposed in January a blanket ban on all crypto-related activities in Russia. The financial authority maintains that digital currencies decentralized like bitcoin can’t 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 promotes strict supervision over prohibition.

The ministry presented a bill “On Digital Currency”, which was designed to regulate the entire country’s cryptocurrency market, just days before the Russian army crossed over the Ukrainian border. Alexander Yakubovsky (a Russian lawmaker who is working on crypto regulations) suggested that cryptocurrencies could be used to help Russia regain access to global finance.

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