While Russia prepares for a nationwide launch of the digital ruble, the Russian CBDC, it has also rejected crypto for domestic payments. Elvira Nabiullina, governor of the Bank of Russia, stated that cryptocurrencies cannot be used for settlements within the country.
Bank of Russia Rejects Crypto Usage for Internal Payments
The Facts
The Bank of Russia has rejected the possibility of adopting cryptocurrency assets to complete payments inside the country.
During a speech at a session in the State Duma, Russia’s equivalent of the House of Representatives, Bank of Russia’s head Elvira Nabiullina stated:
Cryptocurrency cannot be used for payments within Russia.
The statement reinforces the stance previously assumed by the institutions, which has stated that cryptocurrencies should not be used for national settlements as national regulators do not control them.
Nonetheless, Russian institutions have supported the use of these assets for international disbursements, as authorities signal the opportunities that cryptocurrencies can bring for these activities.
Russian Finance Minister Anton Siluanov recently highlighted that he saw a “significant area of work” in this area. He stressed that “payments for imports, payments, and the withdrawal of currency from the country are carried out using the crypto market and cryptocurrency payments,” calling for the legalization and streamlining of the international payment market with the central bank as regulator.
Why It Is Relevant
A de facto ban on the use of cryptocurrency for internal payments clarifies the position of the central bank on these assets as the launch of the digital ruble, the Russian central bank digital currency (CBDC), draws close.
By removing the possibility of the use of competing currencies, the institution is gearing up to a complete adoption of the digital ruble, which is planned to be launched by fall 2026 according to recent reports.
The Finance Ministry estimates that 20 million citizens use crypto, holding over $10.15 billion at the end of Q1 20205. This stance restricts the use cases for these holdings.
Looking Forward
The use of crypto for retail payments in Russia is closed for the time being, as regulators estimate they cannot control these flows. The stance paves the way for the exclusive use of the upcoming digital ruble, establishing a monopoly of currencies in Russia.
FAQ
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What recent decision did the Bank of Russia make regarding cryptocurrencies?
The Bank of Russia has officially rejected the use of cryptocurrency assets for payments within the country, reinforcing its existing policy. -
What reasons did the Bank of Russia provide for this decision?
Bank of Russia head Elvira Nabiullina stated that cryptocurrencies are not controlled by national regulators, making them unsuitable for domestic transactions. -
What is the government’s position on using cryptocurrencies for international transactions?
Russian authorities support using cryptocurrencies for international payments, highlighting potential benefits for import payments and currency withdrawal operations. -
How does this stance affect the launch of the digital ruble?
With a ban on cryptocurrency for domestic payments, the Bank of Russia is focusing on the upcoming digital ruble, expected to launch by fall 2026, establishing a monopoly on currency use within the country.
