The post Russia Trials Cross-Border Crypto Payments to Circumvent Sanctions: A Focus on the Ruble appeared on BitcoinEthereumNews.com.

Russia is set to trial cross-border cryptocurrency payments next week as a strategy to navigate international sanctions. The new legislation, passed in July, does not recognize cryptocurrencies as legal tender domestically but allows for transactional use in international trade. Valerie Kennedy from Chainalysis highlighted that this move reflects Russia’s intent to devise strategies that might mitigate the impacts of Western sanctions. Russia aims to leverage crypto for cross-border payments, but experts are skeptical about the effectiveness of this strategy amid stringent sanctions. The New Legislation and Its Implications On September 1, Russia will implement a new law that specifically facilitates the use of cryptocurrencies for international payments. This development comes in the wake of severe sanctions imposed by various Western nations following Russia’s military activities in Ukraine. The legislation grants authority to the central bank to regulate these transactions under an “experimental” framework, although specific guidelines and operational details remain unexpectedly vague. Challenges Surrounding Implementation Legal and policy analysts assert that the lack of clarity on operational regulations poses a significant challenge. While the law authorizes the central bank to oversee these cross-border transactions, the undefined parameters raise questions about its true efficacy. Industry stakeholders, such as Anti Danilevski of Kick Ecosystem, report having submitted proposals to the central bank, illustrating the ongoing discourse surrounding regulatory conditions. This uncertainty may deter participation and investment in the proposed framework. The Impact of Sanctions on Russia’s Economy Since the onset of the Ukraine conflict, Russia has encountered over 16,500 sanctions affecting its economy severely. Among those, crucial sanctions have targeted the country’s access to vital foreign currency reserves, with a substantial portion frozen by Western entities. Reports estimate that around 300 billion euros of Russian reserves have been hindered, significantly narrowing the Kremlin’s operational space in international finance. Anticipated Outcomes of Experimental…

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Filed under: News - @ August 30, 2024 8:18 am