Russia Rethinks Crypto Exchanges to Smooth Payments Obstacles

Russia is reportedly preparing to begin trials of cryptocurrency exchanges and cross-border crypto transactions.

That’s according to a report Monday (Aug. 26) by Bloomberg News, which noted that the move is designed to solve the payment troubles the country has been facing after more than two years of worldwide sanctions.

Sources told Bloomberg the trials will start Sept. 1, with the country using the National Payment Card System to swap between rubles and cryptocurrencies when testing payments and the exchange platform.

According to the report, Russian lawmakers adopted bills last month legalizing crypto mining and a framework for the testing of digital tokens for cross-border payments under supervision by the central bank. Russian President Vladimir Putin signed the bills into law on Aug. 8. 

Russian businesses have been facing increasing difficulties in paying foreign suppliers and getting paid for exported goods, following a move by the U.S. in June to broaden the criteria for sanctioning foreign banks working with Russia.

In the months leading up to Russia’s invasion of Ukraine – which triggered the sanctions – the country’s central bank had proposed a sweeping crypto ban.

Also Monday, PYMNTS examined the use of the stablecoins for streamlining cross-border transactions, writing that it is in the B2B sector where this idea holds particular promise. 

“It’s important to know that crypto is not just bitcoin and Doge and NFTs,” Sheraz Shere, head of payments at Solana Foundation, told PYMNTS in May. “… Blockchains are really alternative rails for payments and financial assets.” 

“An issue has been that the technology has not been user-friendly,” Shere added. “It’s all been designed by engineers … to be very tech-centric and not use case or UX centric.”

Traditional international payment methods like wire transfers can be slow, expensive and subject to various regulatory hurdles. But stablecoins offer a more efficient alternative with transactions that can be carried out almost instantaneously, with fewer intermediaries and lower fees.

And because stablecoins are pegged to a stable asset like the dollar, businesses can use them for transactions without needing to worry about currency fluctuations that could impact the final amount received or paid.

“People are rewiring their businesses around payments,” Thredd CEO Jim McCarthy told PYMNTS in April. “The winners in the future truly will understand that payments [are] at the middle of everything they do.”