Russia to Finalize Rules on Cross-Border Crypto Payments by End of 2022

Russian Prime Minister Mikhail Mishustin has ordered the government to establish rules on cryptocurrency regulation by the end of this year.

The expected date for the Russian government to reach consensus is set for December 19, 2022.

The Prime Minister has clearly instructed the House of Commons and other state authorities on the need for coordinated policies regarding the issuance and circulation of cryptocurrencies or digital currencies in Russia.

Mishustin mentions not only issuance and distribution, but also regulatory requirements for cryptocurrency mining and cross-border trading.

The draft cryptocurrency regulation should be in sync with the Russian Ministry of Finance, the Central Bank, the anti-money laundering agency Rosfinmonitoring, the Federal Tax Service and the Federal Security Service.

Just a week ago, Deputy Finance Minister Alexei Moiseev said the Bank of Russia was joining the ministry to allow cryptocurrencies for cross-border payments.

Russia is getting serious about crypto and its use

The Russian government plans to implement the regulations by the end of this year. Draft documents must be ready by December 1, 2022 at the latest.

This requirement by the Russian government sheds light on one aspect. This confirmation shows that Russia has begun to attach great importance to issues related to cryptocurrencies, especially cross-border transactions.

Russia’s stance on digital assets is quite polarized. While the Central Bank of Russia is still against legalizing exchanges and approving digital assets as a means of payment, it wants to approve cross-border transactions.

The idea of ​​banning exchanges but allowing cross-border payments caused a lot of problems.

How Russia plans to distinguish between domestic and cross-border payments remains to be elucidated.

Russia happens to be the first country to agree to cross-border payments, but has yet to accept digital asset payments and exchanges within the country.

Cryptographic uncertainty

Even after adopting major crypto-related laws on digital financial assets in 2020, Russia’s jurisdiction over digital assets remains vague and uncertain.

The law prohibited Russians from using cryptocurrencies for payments, but it did not prohibit activities such as cryptocurrency trading and mining in Russia.

Russian financial regulators have yet to approve such local digital asset trading platforms, only allowing digital asset trading through well-known exchanges such as Binance.

Regulations on cross-border payments need to be developed because it is necessary to simplify access for foreign investors and issuers to the Russian financial market. For hassle-free cross-border transactions, remote identification mechanisms must be put in place.