Russian Financial Institution Rosbank Conducts Test Runs of International Crypto Transactions for Corporate and Individual Customers
The Russian bank Rosbank has become the country’s first central bank to conduct international crypto payments.
A Rosbank spokesperson told Vedomosti that the bank has begun testing the service with commercial and individual customers. With this new method, an importer may send money to a foreign vendor to buy cryptocurrency.
Russian fintech firm B-crypto handles technical assistance for crypto transactions. This means that for Russian businesses to use the new cryptocurrency service, they must go through a verification or KYC procedure that Rosbank and B-crypto must approve.
After KYC checks are completed and passed, the client agrees to deposit fiat monies into a B-crypto-administered Rosbank account in exchange for cryptocurrency. The bank then sends the funds to B-crypto, which acquires cryptocurrency in amicable nations and sends the proceeds to the outside service provider.
Although Rosbank is the first big bank to provide this option, Alexei Voilukov, vice president of the Russian Banks Association, said that larger banks still do not offer such services “due to the lack of cryptocurrency liquidity” needed to cater to their more significant consumers.
And here is where the niche services of smaller banks come in handy for the general public. According to Eduard Davydov, Senior Partner at Emet Law Firm, using cryptocurrencies in cross-border transfers may cause worry about sanctions evasion since several nations are taking steps to include crypto transactions in their sanction regimes.
There may be long-term legal repercussions for governments that use cryptocurrency for international transfers to circumvent sanctions.
However, a nation under sanctions may not give legality top priority. Cuba, Venezuela, Iran, Iraq, and Russia are just a few countries that cannot freely trade their essential commodities.
According to figures compiled by Castellum, Russia has been hit with over 13,263 penalties in response to its invasion of Ukraine, most of which have come from the United States and Switzerland.