Despite Russia pushing the idea of using cryptocurrencies for cross-border payments, it still remains unclear what digital asset exactly the government plans to adopt for such transactions.
Russian authorities are quite unlikely to approve the use of cryptocurrencies like Bitcoin (BTC) for cross-border transactions, according to local lawyers and fintech executives.
Bank of Russia needs to control cross-border transactions
It’s “highly questionable” that Russia would allow usage of Bitcoin or any other similar cryptocurrency for cross-border payments because such assets are “hard to control,” according to Elena Klyuchareva, the senior associate at the local law firm KKMP.
Klyuchareva emphasized that the draft amendments to the legislation on cross-border crypto payments are not available yet, while reports only state that the Bank of Russia and the Ministry of Finance have agreed upon a common approach to the issue.
The lawyer told Cointelegraph that the cryptocurrency used by Russia for cross-border payments will most likely be local, so Russian regulators can properly monitor and control such transactions. She also suggested that only major institutional players — like banks — will be able to comply with requirements for making cross-border payments.
USDT and USDC are questionable as the stablecoins are issued in the US
Russia should be choosing a cryptocurrency for cross-border settlement while eliminating all possible pressure from other countries, according to Eduard Davydov, the senior partner at Emet Law Firm. As such, cryptocurrencies issued in the United States, including major stablecoins like Tether (USDT) or USD Coin (USDC), will “not meet such requirements,” Davydov assumed.
As the world’s most decentralized cryptocurrency, Bitcoin might look more suitable in such a context, but BTC is also associated with a number of issues like high volatility, limited scalability as well as vulnerability to global sanctions. “Whole arrays of addresses may fall under the sanctions when interacting with which the coins will be considered ‘dirty’ and counterparties may choose not to make transactions with such addresses or coins,” Davydov noted.
Bitcoin looks suitable due to its decentralized nature, but volatility is too high
Sergey Mendeleev, CEO and co-founder of InDeFi Smart Bank, also believes that decentralized cryptocurrencies like Bitcoin would only make a good choice for Russia’s crypto cross-border payments if they were less…
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