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Russian Bank Defies Sanctions with New Crypto Payments System

dailycoin.com 05 June 2023 13:00, UTC

Rosbank launches a cross-border crypto payments system, defying sanctions.
The bank is currently conducting test transactions with private and corporate clients.
This move marks Rosbank as the first Russian bank to provide such a service.

Amid the ever-escalating conflict with Ukraine, Russia increasingly leverages crypto to evade sanctions. In a move that challenges international sanctions, Rosbank has launched a cross-border payments system utilizing crypto assets.

This development, announced on June 4, 2023, marks a significant shift in the country’s banking industry. Consequently, Rosbank became the first Russian bank to offer such a service, integrating cryptocurrency into traditional banking services.

Rosbank’s Crypto for Cross-Border Payments

Rosbank, the 11th largest bank in Russia in terms of assets, is piloting a crypto-based cross-border payment. In particular, the system will help private and corporate clients could help Russian companies evade Western sanctions.

According to a recent report, a representative of Rosbank confirmed they are already conducting test transactions with its clients. Specifically, the service will primarily appeal to small and medium businesses, the bank revealed.

A Russian company must undergo the KYC (Know Your Customer) verification in Rosbank to use the service and pay for imported goods or services in crypto. Furthermore, the invoice must specify the address of the crypto wallet.

Russian fintech service B-crypto, which specializes in international digital currency payments, handles the technical side of the offering.

Russia Turns to Crypto to Dodge Sanctions

The use of cryptocurrencies by Russia to evade sanctions has been a topic of concern for global financial regulators. Russian companies and the government have been reportedly leveraging digital currencies to blunt the impact of U.S. sanctions, particularly in the wake of the conflict with Ukraine.

Reports suggest that Russian companies have many crypto tools to evade sanctions. Experts have also warned that Russia has been preparing to counteract sanctions by developing protocols to mask the source of crypto trades.

On the Flipside

Rosbank is one of the financial institutions under United States sanctions, which target individuals and entities connected to the Russian government.
Vladimir Chistyukhin, First Deputy Chairman of the Bank of Russia, said that crypto payments would likely not become a panacea for international payments.

Why This Matters

The launch of a cross-border crypto payments system by a major Russian bank is a significant development for crypto traders. The move signals a growing acceptance of cryptocurrency in traditional banking, potentially paving the way for increased adoption of digital assets.