Rosbank, one of the Russian Federation’s leading financial institutions, will become the first major bank to offer cryptocurrency cross-border transactions, according to reports from the Russian business magazine Vedomosti.
The bank emphasized that these transactions are strictly in line with existing legal requirements, Central Bank guidelines and the bank’s own compliance policy.
Rosbank has partnered with Russian fintech service B-Crypto, which offers its customers a technical solution to participate in cross-border digital currency transactions.
The process of paying foreign suppliers in crypto is not an easy one. Under the process, Russian companies that choose to pay for imported goods or services in cryptocurrency can do so after making arrangements with the supplier and specifying the wallet from which it will pay. The delivering company then issues an invoice with the amount due in cryptocurrency and the address of the receiving wallet.
Once the contract is signed, the purchasing company deposits the amount due in fiat money into its Rosbank account; Rosbank then transfers the money to the external partner institution B-Crypto, which uses the money to buy the desired cryptocurrencies from so-called “friendly” countries and then forwards it to the supplier.
Russia’s stance on crypto
The Kremlin’s stance on crypto is unsupportive, and its use as a medium of exchange for goods and services has been banned in Russia since last July.
The Bank of Russia also prohibits the use of cryptocurrencies in the national economy, permitting their use outside of Russian infrastructure and in cross-border operations. Russian law currently lacks a basis for digital currency transactions. The country’s Digital Financial Assets (DFA) law even prohibits private Russian residents from accepting digital currencies as payment for goods and services.
Vedomosti reported that the remaining top 50 Russian banks, when questioned, did not confirm that they provided similar services. Aleksey Voylukov, vice president of the Association of Russian Banks, admitted that he had not seen other examples of such implementations in major banks.
Andrey Tugarin, managing partner of the legal firm GMT Legal, states that B-crypto’s cryptocurrency activities are fully within the legal framework. He emphasizes that the DFA law only applies to transactions that go through the Russian information infrastructure.
As the DFA law is currently under review in the State Duma, potential amendments could allow digital currency transactions within an experimental legal regime.