Cryptocurrencies

Russian firms use crypto for Chinese imports amid sanctions

Article Image

A select group of Russian companies has been authorised to use cryptocurrencies for imports from China under a pilot framework overseen by Russia’s central bank and the Ministry of Finance. 

This initiative is aimed at firms dealing with dual-use products, such as electronics producers and financial institutions, which have faced difficulties with international payments, particularly in their trade with China. 

According to Mikhail Uspensky, a member of the State Duma’s expert council on cryptocurrency regulation, only a limited number of companies have been approved to participate in this program, allowing them to conduct regulated cryptocurrency transactions for trade purposes. 

The companies were chosen based on their significant transaction volumes, but medium-sized businesses are unlikely to gain access to the pilot framework at this stage. 

Although Russian law does not prohibit the use of cryptocurrency for international transactions, the legal landscape remains unclear outside this pilot program. 

The framework simplifies the process of converting cryptocurrencies into fiat currencies through banks, yet concerns persist over the transparency of blockchain technology. 

According to experts, the transparency could enable tracing of transactions aimed at bypassing sanctions, risking a swift shutdown of the system. 

Yuri Brisov, a partner at Digital & Analogue Partners, noted that while cryptocurrency can facilitate trade, it does not offer complete protection from sanctions. 

"All blockchain transactions are publicly verifiable, making it difficult to hide activities that seek to avoid sanctions," he said. 

Officials warn that the program’s success depends on its responsible use, emphasising that it should be limited to trade with nations that have not sanctioned Russia. 

Any misuse could jeopardise the ongoing experiment and lead to stricter oversight or discontinuation of the pilot framework. 

Disclaimer
Grafa is not a financial advisor. You should seek independent, legal, financial, taxation or other advice that relates to your unique circumstances. Grafa is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on the information provided directly or indirectly by use of this platform.
Publisher
Grafa