Russia’s central bank has advised businesses to make foreign payments using cryptocurrencies or other digital assets to avoid sanctions imposed by the West on Russia over its incursion into Ukraine. Reuters reported on Wednesday.
Russia’s booming trade
Russia’s burgeoning trade with China, India, the United Arab Emirates, Turkey and other countries that did not impose sanctions has faced major difficulties in the past few weeks. The latest Western sanctions have targeted major Russian financial institutions, including the Moscow Stock Exchange and Russia’s domestic alternative to the global payments system SWIFT.
Central Bank Governor Elvira Nabiullina has acknowledged that payment problems are one of the key issues for the Russian economy. “New financial technologies are creating opportunities for schemes that did not exist before.That’s why we have softened our stance on the use of cryptocurrencies in international payments and allowed the use of digital assets in these payments,” Nabiullina said at a financial conference in St. Petersburg.
Alternative payment systems
“Various alternatives are being considered. Companies have become very flexible and entrepreneurial. They are finding ways to find solutions and often don’t even share them with us,” she said. She said Russia’s trading partners in various countries are under “enormous pressure”. But she believes that a new global payment system will gradually emerge that does not include Western institutions, as many countries feel vulnerable using just one international payment system with no alternatives.
Nabiullina also said Russia and other countries in the BRICS grouping – which includes Russia, China and India, among others – are discussing a payment system called BRICS Bridge, which would link the financial systems of member countries. However, she added that these discussions are difficult and that it will take time to create such a system.
Andrei Kostin, head of Russia’s second-largest bank VTB, whose Shanghai branch was recently sanctioned, said that any information on mechanisms to facilitate international payments should be “state secret” by law because of their sensitivity. “I can very well see that right now there is a second secretary sitting somewhere in the US embassy taking down every public statement we make. Maybe he’s sitting here too. Whatever steps we take, we see that the reaction (of Western countries) is very quick,” he added.
Source: Czech Press Office
