Russia-based Rosbank launched a new service on Friday that enables cross-border settlements using cryptocurrencies. Rosbank, the first Russian bank to launch such a service, is one of the country’s banks in the West’s sanctions package to limit Moscow’s war efforts in Ukraine.
Rosbank Taps Russian Fintech Firm to Enable Cross-Border Crypto Payments
Rosbank, one of the biggest Russia-based banks, launched a cryptocurrency cross-border settlement solution, according to a report by the local newspaper Vedomosti. The bank is the first Russian bank to roll out such a service.
Rosbank’s representative told Vedomosti that the bank is already conducting pilot transactions with some private and corporate clients. The technical side of the settlements is handled by B-crypto, a Russian fintech firm providing international digital currency payment services.
The solution allows Rosbank’s clients to pay for imported goods or other services using cryptocurrencies. However, before using the new feature, the clients must go through a Know Your Customer (KYC) process at Rosbank and B-crypto.
If a Russian company wishes to buy imported goods or services using crypto, it previously must state the possibility of such payments and offer its crypto wallet address in the contract with the supplier. Meanwhile, a foreign supplier issues an invoice for the Russian client, which needs to include a description of goods and services and an indication of the amount in cryptocurrency and the wallet address.
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Rosbank’s New Service Could Lead to Further Crypto Sanctions Against Russia
The move comes several months after the US government imposed serious sanctions against Rosbank and other major banks in Russia to limit Moscow’s efforts to fund its invasion of Ukraine. The US Treasury Department’s Office of Foreign Assets Control (OFAC) announced the restrictions, describing Rosbank as a “systemically important credit institution” in Russia.
Eduard Davydov, a senior partner at Emet Law firm, said that Rosbank’s newly-launched cross-border solution might attract criticism from the West, who could see the bank’s move as a way to circumvent the sanctions. In addition, many countries are already taking steps to include crypto transactions in their sanctions packages against Russia.
The US government, led by the Biden administration, hinted at plans to sanction Russia’s crypto market right after its invasion of Ukraine in 2022. Similar moves by private crypto firms such as Crypto.com and Blockchain.com followed the West’s swift actions against Russia.
Do you think the US and the EU will take steps to restrict Rosbank’s new cross-border solution? Let us know in the comments below.
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