Russia to use crypto for international transactions on Sept 1

The Russian government has revealed plans to begin regulated trials of cryptocurrency exchanges for cross-border payments, set to launch on September 1, 2024.

According to insiders familiar with the initiative, Russia will leverage its National Payment Card System (NPCS) to convert rubles into cryptocurrencies for international transactions. The NPCS, which currently manages ruble-based interbank settlements, will be modified to accommodate these crypto-payment trials under the oversight of the Central Bank of Russia.

This move comes as Russian businesses face challenges maintaining overseas operations due to widespread financial sanctions imposed by the U.S. and its allies after Russia's 2022 invasion of Ukraine. "We still haven’t found a solution for this," acknowledged Russian Finance Minister Anton Siluanov.

Russia's central bank had previously advocated for an outright ban on cryptocurrency activities, citing risks to financial stability and concerns over illicit transactions. However, the stance has shifted as the government now views digital assets as a possible means to counter the effects of sanctions.

"The urgency is clear," noted an anonymous expert. "Russian companies are struggling to pay foreign suppliers and receive payments for exports, especially after the U.S. tightened restrictions in June on foreign banks that deal with Russia."

These upcoming trials are part of a wider effort by the BRICS nations (Brazil, Russia, India, China, and South Africa) to reduce dependence on the U.S. dollar in global trade—a strategy known as "de-dollarization." The BRICS countries have been exploring alternative payment systems, including the use of cryptocurrencies, to shield their economies from U.S. financial influence.