Russia Sets Date for Cryptocurrency Pilot in International Settlements

Deputies of the State Duma have introduced a revised draft law permitting the Central Bank to initiate an experimental platform for using cryptocurrencies in international settlements starting from September 1, 2024. This was reported by Interfax.

During the experiment, the regulator must coordinate several steps with Rosfinmonitoring, the FSB, and the Ministry of Finance.

The document allows the Central Bank to establish special rules within the experimental program, differing from the existing currency regulation law. 

Specifically, it concerns the rules for using cryptocurrency as a currency value, including its use for payments under foreign trade agreements between residents and non-residents.

“Current regulation prohibits the use of digital currency as a counter-provision for goods, work, and services. The submitted draft law allows for the removal of this legal barrier,” states the explanatory note.

Interaction with participants in the experiment will be organized through the Central Bank of Russia’s website. The specific mechanism for transactions will be outlined in a separate regulatory act by the regulator.

CEO of Indefibank, Sergey Mendeleev, criticized the draft law in his Telegram channel, stating that it “excessively expands the Central Bank’s rights in establishing the ELR for cryptocurrencies.” In his view, effective use of cryptocurrencies in FEA is impossible without their free circulation within Russia. 

“You will only make things worse, as with the March amendments that supposedly allowed the use of CFA in FEA, but in reality blocked loopholes for buying and selling digital and other rights and assets for foreign exchange contracts. As a result, importers have been scrambling for payment options for a couple of months, rates have increased by 1.5-2%, and the end consumer, meaning us, pays for everything,” he wrote. 

Back in late February, Russia permitted the use of digital financial assets and utilitarian digital rights for international agreements.

At that time, experts questioned the demand for the instrument and pointed out several issues with CFAs, including liquidity.