Russia's Rosbank Launches Cryptocurrency Payment Solution for Cross-Border Settlements

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Rosbank has launched a cryptocurrency payment solution for international transactions. Banks increasingly involved in cryptocurrency exchange services.

Rosbank has become the first major Russian bank to offer its customers the ability to use cryptocurrencies for international settlements. This innovative solution, developed in collaboration with a Russian fintech company, is primarily designed to meet the needs of businesses operating with foreign partners.

According to a representative from Rosbank, the financial institution is currently conducting pilot transactions with private and corporate clients. The service is a novelty in the industry and complies with all Russian legislation and requirements of the Central Bank of Russia (CBR). While the Central Bank of Russia has always been opposed to the free circulation of cryptocurrencies in the country, it is much more favorable to their use in cross-border transactions. However, the central bank has stated that such transactions must be conducted outside the Russian financial infrastructure. The sources bitocoin.com and cryptodaily.co.uk do not reveal any further information on this, however, the information has been made public.

The Russian law "On Digital Financial Assets" prohibits Russian residents from accepting cryptocurrencies as payment for goods and services, but amendments to the law are currently under discussion that could expand its scope and legalize cryptocurrency transactions under an "experimental legal regime."

Confindustria reported on June 28th, "The European Union, the United States, and other countries have adopted a series of restrictive measures against the Russian Federation in response to Moscow's decision to recognize the self-proclaimed Donetsk and Luhansk People's Republics and carry out military operations in Ukraine." in the "Eighth package of sanctions" "The ban on providing cryptocurrency wallets, accounts, or custody services to Russian individuals and residents becomes total, regardless of their value." "The geographical scope of the restrictions applied to the Donetsk and Luhansk oblasts is also extended to Zaporizhzhia and Kherson." "The list of listed subjects is expanded, with the introduction of an additional criterion for the designation of those who facilitate the circumvention or evasion of sanctions."

Using Cryptocurrencies as a Solution to Western Sanctions

Russia is currently under significant economic pressure due to sanctions imposed by Western countries in response to the invasion of Ukraine. As a result, both the government and companies in the country are seeking solutions to bypass these restrictions. One of the options being considered is increasing the use of cryptocurrencies and national currencies for international payments. Although cryptocurrency regulation in Russia is still under development and there is no definitive legislation yet, some companies have already begun using these digital currencies for cross-border transactions, despite the lack of specific rules in this regard.

#Rosbank, a major Russian bank, has partnered with the fintech platform B-crypto to offer a new service. B-crypto is a company specialized in facilitating international payments using digital currencies such as cryptocurrencies. Let's imagine that a Russian company wants to pay a foreign supplier using a cryptocurrency like Bitcoin. This transaction will take place in accordance with a contract between the two parties, specifying the use of cryptocurrency as the method of payment. In the invoice issued by the supplier, the address of the digital wallet to which the cryptocurrency payment should be sent and the corresponding amount will be indicated. Thanks to the partnership between Rosbank and B-crypto, Rosbank will accept deposits in traditional currency, while B-crypto will handle processing the payments, converting the cryptocurrency into fiat currency if necessary.

For example, let's imagine that a Russian clothing company has a fabric supplier in Germany. The Russian company decides to pay the supplier using Bitcoin. In the business contract between the two companies, it is specified that the payment will be made through cryptocurrency. When the supplier issues the invoice for the fabrics, they will include the address of the Russian company's Bitcoin wallet and the amount due in Bitcoin.

Rosbank will accept the deposit in Russian currency from the Russian company and will transfer the equivalent in Bitcoin to the German supplier through B-crypto. This way, the Russian company can make international payment using cryptocurrencies, thanks to the collaboration between Rosbank and B-crypto.

Future Prospects and Institutional Involvement

Russia is currently under economic pressure due to sanctions imposed by Western countries in response to the invasion of Ukraine. Faced with these restrictions, the Russian government and companies are exploring alternative solutions for international payments. One idea being considered is the use of cryptocurrencies and national currencies to facilitate cross-border transactions.

Rosbank, the Russian bank, has partnered with the fintech platform B-crypto to introduce a new service that will allow Russian businesses to make payments to their foreign partners using cryptocurrencies. For example, let's say a Russian company needs to pay a supplier in China. Instead of using traditional money such as the Ruble or the Renminbi, the company can choose to use a cryptocurrency like Bitcoin or Ethereum. This payment will then be recorded in the contract between the two parties, indicating the supplier's wallet address and the amount in cryptocurrency to be transferred. Rosbank will handle accepting deposits in traditional currency, while B-crypto will handle converting the cryptocurrency and processing the payment.

This partnership between Rosbank and B-crypto represents a significant step forward in using cryptocurrencies for international payments. However, it is important to note that cryptocurrency regulation in Russia is still in development, and there is no specific legislation in place yet. Nonetheless, some companies are already experimenting with the use of cryptocurrencies for cross-border transactions, despite the lack of clear regulations in this regard.

This new service offered by Rosbank and B-crypto could pave the way for new opportunities for Russian businesses to bypass sanction restrictions and manage international transactions more efficiently. However, it is important to keep in mind that using cryptocurrencies also comes with risks, such as price volatility and the potential for fraud. Therefore, interested businesses are advised to research and consult experts before taking any action.

Conclusion, Rosbank is at the forefront of offering innovative solutions for international payments through the use of cryptocurrencies. Despite the current legal restrictions, the cryptocurrency landscape in Russia could change in the future, opening up new opportunities for businesses and cross-border transactions.

What Binance said about it on June 3, 2023: Rosbank has successfully tested a new cryptocurrency payment service among its corporate and private clients. The bank is seeking to use cryptocurrencies to bypass financial sanctions imposed on Russia. Currently, it is partnering with B-crypto, a fintech company, to enable the buying and selling of cryptocurrencies. Russia is considering the adoption of cryptocurrencies in payment services to overcome international sanctions and has proposed the creation of its own national cryptocurrency exchange.

Technical Glossary:

Cryptocurrencies: Decentralized digital currencies based on cryptography.
International regulations: Financial transactions involving different countries.
Sanctions: Restrictive measures imposed by one country or group of countries on another country as a form of political or economic pressure.
Central Bank of Russia: The financial institution responsible for regulating the banking system and monetary policy in Russia.
Fintech: Innovative financial technologies that improve efficiency and access to financial services.
Law on Digital Financial Assets: A Russian law that regulates financial activities involving cryptocurrencies and other forms of digital currency.
Experimental legal regime: A legal framework that allows for the exploration and testing of new forms of regulation in a specific sector.
Tokenized assets: Digital representations of physical or financial assets that can be traded on the blockchain.
Central Bank Digital Currency (CBDC): A form of digital currency issued by a central bank, which can serve as a digital equivalent of traditional state-issued currencies.

Topics covered:

The introduction of cryptocurrencies in international settlements by Rosbank.
Russia's stance on cryptocurrencies and the current legal restrictions.
The future prospects of cryptocurrencies and institutional involvement in the industry.

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Source by Redazione