Rosbank, one of Russia’s leading financial institutions, has announced its plans to become the first major bank to provide cross-border cryptocurrency transactions. The move comes as Rosbank collaborates with B-Crypto, a Russian fintech service that offers a technical solution for customers to participate in digital currency transactions across borders. Rosbank has emphasized that these transactions comply with existing legislative requirements, the Central Bank’s guidelines, and the bank’s own compliance policy.
The Process for Paying Foreign Suppliers in Cryptocurrency
The process of paying foreign suppliers in cryptocurrency is not straightforward. Russian companies that opt to pay for imported goods or services in cryptocurrency may only do so after making arrangements with the supplier and indicating the wallet from which they will pay. The supplier then issues an invoice that includes the amount due in cryptocurrency and its receiving wallet address. Once the contract is signed, the purchasing company deposits the owed amount in fiat cash into its Rosbank account. Rosbank then transfers the money to third-party partner institution B-Crypto, which uses the money to buy the desired cryptocurrencies from “friendly” nations and then forwards it to the supplier.
The Legal Parameters of Cryptocurrency Activities
The use of cryptocurrency as a medium of exchange for goods and services has been banned in Russia since last July, and the Kremlin’s stance on crypto is not supportive. The Bank of Russia also prohibits crypto use in the national economy, but it permits its use outside of Russian infrastructure and in cross-border operations. Russian legislation currently lacks a foundation for digital currency transactions. The country’s digital financial assets (DFA) law prohibits even private Russian residents from accepting digital currency as payment for goods and services.
The remaining top 50 Russian banks have not confirmed providing similar services when queried. Aleksey Voylukov, Vice-President of the Association of Russian Banks, stated that he had seen no other examples of such implementations among large banks. However, Andrey Tugarin, managing partner of the legal company GMT Legal, has stated that B-Crypto’s cryptocurrency activities are entirely within the legal parameters. He emphasizes that the DFA law only pertains to transactions conducted via Russian information infrastructure. As the DFA law currently stands under review in the State Duma, potential amendments could allow digital currency transactions within an experimental legal regime.
In summary, Rosbank, in collaboration with B-Crypto, is set to become the first major bank to offer cross-border cryptocurrency transactions. The process for paying foreign suppliers in cryptocurrency is complex, and compliance with existing legislative requirements is emphasized. While the use of cryptocurrency as a medium of exchange for goods and services is banned in Russia, its use in cross-border operations is permitted. The legal parameters of cryptocurrency activities are subject to review, and potential amendments could allow digital currency transactions within an experimental legal regime.