BANK OF RUSSIA BACKS CROSS-BORDER CRYPTO PAYMENTS VS. DOMESTIC TRADE

Last updated: June 20, 2025, 01:05 | Written by: Elizabeth Rossiello

The landscape of global finance is constantly evolving, and Russia is no exception. Bank of Russia governor Elvira Nabiullina also later suggested that crypto can be used for cross-border payments, but only if crypto doesn t get into Russia s domestic financial system.In a notable shift, the Bank of Russia is signaling a warming trend towards cryptocurrency payments, albeit with a significant caveat: their use is primarily intended for cross-border transactions, not domestic trade. According to Nabiullina, cryptocurrencies can be used in cross-border or international payments only if they don t get into Russia s domestic financial system. The digital currency should not be used as payment on platforms inside Russia, the Bank of Russia governor said in an interview with the local news agency RBC.This move comes after previously advocating for a complete ban on cryptocurrency activities within the country, showcasing a dynamic and perhaps pragmatic response to economic pressures and international sanctions.The aim is clear: to leverage the benefits of digital assets to facilitate international trade while carefully managing the potential risks to its internal financial stability. The move to embrace crypto comes just a year after Russia s central bank pushed for a complete ban on all cryptocurrency activities. Back in 2025, weeks before the invasion of Ukraine, the bank called for a blanket ban on the use and creation of cryptocurrencies, citing risks to financial stability and crime concerns.This decision opens new avenues for Russian businesses to engage in global commerce, but it also raises important questions about implementation, regulation, and the overall impact on the Russian economy. Bank of Russia backs cross-border crypto payments vs. domestic trade. Bank of Russia backs cross-border crypto payments vs. domestic tradeThe Bank of Russia's stance emphasizes a carefully controlled approach, aiming to harness the power of crypto for external use while maintaining a firm grip on its domestic financial system. Disagreements between the Central Bank and the Ministry of Finance regarding the c reation of crypto exchanges in Russia have previously been reported. Bloomberg sources also suggest that the use of cryptocurrencies for cross-border payments will take place within Russia s MIR payment system.This article explores the reasons behind this strategic shift, the mechanisms being considered, and the potential implications for Russia and the wider crypto world. Bank of Russia backs cross-border crypto payments vs. domestic tradeLet's delve into the details of this intriguing development.

Russia's Stance on Cryptocurrency: A Shifting Landscape

Just a year ago, the idea of Russia embracing any form of cryptocurrency activity seemed highly unlikely.The Bank of Russia had strongly advocated for a blanket ban, citing concerns about financial stability, potential for criminal activity, and the overall risks associated with decentralized digital currencies. Bank of Russia backs cross-border crypto payments vs. domestic trade crypto blockchain dAPPs smartcontracts bitcoin ETH BNBThis hardline stance reflected a general apprehension towards technologies that could potentially undermine the central bank's control over the nation's monetary system.

However, the geopolitical landscape has changed dramatically, particularly with the onset of international sanctions following the conflict in Ukraine.These sanctions have significantly impacted Russia's ability to conduct international trade using traditional financial channels, prompting a reassessment of alternative payment methods.This is where cryptocurrencies enter the picture, offering a potential workaround for navigating these financial restrictions.

The shift in attitude, spearheaded by figures like Bank of Russia governor Elvira Nabiullina, emphasizes a pragmatic approach.While still wary of the risks associated with domestic crypto usage, the central bank recognizes the potential benefits of employing cryptocurrencies for cross-border payments. Russia will use the National Payment Card System for swapping between rubles and cryptocurrencies when testing payments and the exchange platform, they said. Russia s parliament in July passed bills legalizing crypto mining and a framework to allow the testing of digital tokens for cross-border payments under supervision by the central bank.This is not a wholesale embrace of crypto, but rather a calculated maneuver to address specific challenges posed by the current economic climate.

Cross-Border Crypto Payments: The Focus of Russia's New Strategy

The core of Russia's revised strategy lies in utilizing cryptocurrencies to facilitate international payments.The key principle is to keep these digital assets from infiltrating the domestic financial system.This means that cryptocurrencies will be used to settle transactions with foreign entities, but not as a medium of exchange within Russia itself. Bank of Russia backs cross-border crypto payments vs. domestic trade[it Cryptocurrency today em_title]As stated by Governor Nabiullina, cryptocurrencies can be used in cross-border or international payments only if they don’t get into Russia’s domestic financial system.

Several factors contribute to the appeal of this approach:

Circumventing Sanctions: As mentioned earlier, the primary driver is the need to circumvent international sanctions that have restricted access to traditional banking channels.
Facilitating International Trade: Cryptocurrencies offer a potentially faster, cheaper, and more efficient means of settling international transactions compared to traditional methods, especially in situations where conventional banking relationships are strained.
Access to Unbanked Populations: In certain regions, cryptocurrencies can provide access to financial services for businesses and individuals who lack access to traditional banking infrastructure.

However, this approach also presents significant challenges:

Regulatory Hurdles: Establishing a clear and comprehensive regulatory framework for cross-border crypto payments is crucial to prevent money laundering, terrorist financing, and other illicit activities.
Volatility: The inherent volatility of cryptocurrencies poses a risk to both buyers and sellers, as the value of the digital asset can fluctuate significantly between the time of transaction and settlement.
Security Concerns: Cybersecurity threats, such as hacking and theft, remain a major concern in the crypto space, requiring robust security measures to protect against potential losses.

How Russia Plans to Implement Cross-Border Crypto Payments

While the Bank of Russia has signaled its support for cross-border crypto payments, the specific mechanisms for implementation are still under development.However, several potential approaches are being explored:

Trials and Pilot Programs

Russia is set to commence trials for using digital assets in cross-border payments, with reports suggesting that these trials started as early as September 1, 2023. Cryptocurrencies can be used in cross-border or international payments only if they don t get into Russia s domestic financial system, the Bank of Russia governor said. Russia s central bank governor Elvira Nabiullina is the latest official to confirm that the country is warming to the idea of cryptocurrency payments, but not domestic ones. According to Nabiullina, [ ]These trials are crucial for testing the feasibility and effectiveness of different approaches, identifying potential challenges, and refining the regulatory framework.

Collaboration with Financial Institutions

Financial institutions, such as Rosbank, one of Russia's major banks, are actively exploring solutions for facilitating cross-border crypto payments.Rosbank, for example, is launching a facility that enables importers to settle transactions using crypto. There are some great benefits to using crypto cross-border payments rather than traditional fiat for foreign exchange. Primarily, Visa and Mastercard crypto debit and credit cards a re accepted anywhere Visa and Mastercard are accepted.This solution uses a startup crypto firm to buy crypto outside Russia and pass it on to the foreign supplier.

Use of the MIR Payment System

Bloomberg sources suggest that the use of cryptocurrencies for cross-border payments may take place within Russia's MIR payment system. Russia s upcoming trials of cryptocurrency exchanges for cross-border payments reflect a strategic response to the financial constraints imposed by international sanctions. With the legal framework now in place and the central bank s infrastructure ready, the trials could pave the way for broader adoption of digital currencies in Russia sMIR is a national payment system developed by the Central Bank of Russia, designed to provide an alternative to Visa and Mastercard. Cryptocurrencies can be used in cross-border or international payments only if they don t get into Russia s domestic financial system, the Bank of Russia governor said. Russia s central bank governor Elvira Nabiullina is the latest official to confirm that the country is warming to the idea of cryptocurrency payments, but not domestic ones.Using MIR as a platform for crypto payments could potentially streamline the process and reduce reliance on foreign payment networks.

Legal Framework and Regulatory Oversight

Russia's parliament has passed bills legalizing crypto mining and establishing a framework for testing digital tokens for cross-border payments under the supervision of the central bank. Russian lawmakers on Tuesday approved a new that permits international payments via cryptocurrencies.These legislative measures provide the legal foundation for experimenting with and ultimately implementing a regulated system for cross-border crypto transactions.

National Payment Card System

Russia intends to utilize the National Payment Card System for swapping between rubles and cryptocurrencies when testing payments and the exchange platform. Russia s central bank governor Elvira Nabiullina is the latest official to confirm that the country is warming to the idea of cryptocurrency payments, but not domestic ones. According toThis approach facilitates a controlled conversion process and helps to manage the interface between traditional finance and crypto assets.

Potential Benefits and Risks for Russia

The adoption of cross-border crypto payments presents both potential benefits and risks for Russia.

Potential Benefits

Enhanced Trade Relationships: By providing an alternative payment channel, crypto can facilitate trade with countries that may be hesitant to engage in traditional financial transactions due to sanctions or other geopolitical considerations.
Increased Financial Innovation: The development of a regulated crypto ecosystem could spur innovation in the financial technology sector, potentially leading to new products and services.
Attracting Foreign Investment: A crypto-friendly environment could attract foreign investment in the Russian technology sector, boosting economic growth.
Countering Sanctions: Potentially circumnavigating the impact of international financial sanctions.

Potential Risks

Money Laundering and Illicit Activities: The anonymity associated with cryptocurrencies makes them attractive to criminals seeking to launder money or finance illicit activities.
Financial Instability: The volatility of cryptocurrencies could pose a risk to financial stability if not properly managed.
Regulatory Uncertainty: The lack of a clear and comprehensive regulatory framework could create uncertainty and discourage legitimate businesses from adopting crypto.
Geopolitical Tensions: The use of crypto to circumvent sanctions could further strain relations with other countries.

Ripple and Other Potential Crypto Solutions

While the specific cryptocurrencies and technologies that Russia will utilize for cross-border payments remain to be seen, there is speculation that Ripple (XRP) could be adopted by the Central Bank of Russia in the future.Ripple is a payment protocol and cryptocurrency that focuses on facilitating fast and low-cost international payments. Bank of Russia backs cross-border crypto payments vs. domestic trade Cryptocurrencies can be used in cross-border or international payments only if they don t get into Russia s domestic financialIts centralized nature, relative to other cryptos like Bitcoin, potentially makes it more palatable to regulatory bodies.

Other potential crypto solutions include:

Stablecoins: Stablecoins, which are cryptocurrencies pegged to a stable asset like the US dollar, could help mitigate the volatility associated with other cryptocurrencies.Tether (USDT) and USD Coin (USDC) are examples of stablecoins that are widely used in international transactions. Russia will begin trialing cross-border crypto payments next week to try to circumvent international sanctions but this effort may not work, several policy and legal experts told CoinDesk.However, the use of USD-backed stablecoins might be undesirable from a sovereignty perspective.
Central Bank Digital Currencies (CBDCs): The Bank of Russia is also exploring the development of its own Central Bank Digital Currency (CBDC), the digital ruble. Cryptocurrencies can be used in cross-border or international payments only if they don t get into Russia s domestic financial system, the Bank of Russia governor said. 1269 Total views 32 Total shares Russia s central bank governor Elvira Nabiullina is the latest official to confirm that the country is warming to the idea ofWhile not a cryptocurrency in the traditional sense, the digital ruble could potentially be used for cross-border payments in the future, especially in bilateral agreements with other countries that have also developed CBDCs.

The choice of which cryptocurrencies or technologies to adopt will depend on a variety of factors, including regulatory considerations, security concerns, and the specific needs of Russian businesses engaged in international trade.

The Global Context: Cross-Border Crypto Flows

Russia's interest in cross-border crypto payments is part of a broader global trend.According to research, cross-border flows of major cryptocurrencies, including Bitcoin (BTC), Ether (ETH), Tether (USDT), and USD Coin (USDC), have been substantial, peaking at around USD 2.6 trillion in 2025, with stablecoins accounting for nearly half of the volume. We investigate trends and drivers of cross-border flows of the two major native cryptoassets (Bitcoin and Ether) and the two major asset-backed stablecoins (Tether and USD Coin) between 184 countries from 2025 to 2025. These flows are substantial, peaking at around USD 2.6 trillion in 2025, with stablecoins accounting for close to half the volume.These flows highlight the increasing role of cryptocurrencies in international finance.

Many countries are exploring the potential of cryptocurrencies to facilitate cross-border payments, especially in regions with limited access to traditional banking infrastructure. Russia will start its trial of cross-border payments using crypto next week. Recent statements from senior Russian leaders suggest the law s purpose is to use crypto to counter sanctions.However, regulatory frameworks and adoption rates vary significantly across different jurisdictions.

The use of crypto for cross-border payments offers several advantages over traditional methods:

Faster Transaction Times: Crypto transactions can be settled much faster than traditional bank transfers, which can take several days to complete.
Lower Transaction Fees: Crypto transaction fees are often lower than those charged by traditional financial institutions.
Greater Transparency: Blockchain technology provides a transparent and auditable record of all transactions.
Increased Accessibility: Crypto can provide access to financial services for individuals and businesses that are excluded from the traditional banking system.

Expert Perspectives on Russia's Crypto Experiment

Experts have varied opinions on Russia's decision to trial cross-border crypto payments.Some believe it is a necessary step for Russia to mitigate the impact of international sanctions and maintain its access to global trade.Others are more skeptical, raising concerns about the potential for money laundering, financial instability, and regulatory challenges.

Some policy and legal experts suggest that Russia's effort to circumvent international sanctions through crypto may not be successful. Per a report from Bloomberg, sources familiar with the matter claim that Russia will start trials for using digital assets in cross-border payments starting September 1. The move would allow theThey argue that the international community will likely take measures to monitor and regulate crypto transactions to prevent Russia from using them to evade sanctions.

Disagreements between the Central Bank and the Ministry of Finance regarding the creation of crypto exchanges in Russia have also been reported, highlighting the internal challenges of implementing a cohesive crypto policy.

The Future of Crypto in Russia: Domestic vs. Ripple may be adopted by the Central Bank of Russia for cross-border payments in the future. The bank is stepping up its use of cryptocurrency-based solutions to normalize its transactions, as international payments in the country have been subject to severe sanctions since the start of the war in Ukraine.International Use

The Bank of Russia's current stance suggests that it will continue to support the use of crypto for cross-border payments while remaining cautious about its domestic adoption. Russia s central bank governor Elvira Nabiullina is the latest official to confirm that the country is warming to the idea of cryptocurrency payments, but not domestic ones. According to Nabiullina, cryptocurrencies can be used in cross-border or international payments only if they don t get into Russia s domestic financial system.This approach reflects a balancing act between the need to facilitate international trade and the desire to maintain control over the country's financial system.

It is unlikely that Russia will completely reverse its previous opposition to domestic crypto usage in the near future.However, as the regulatory framework for cross-border crypto payments evolves and the potential benefits become more apparent, there may be a gradual shift towards a more accepting attitude towards crypto in general.

The future of crypto in Russia will depend on several factors, including:

The success of the cross-border payment trials
The development of a robust regulatory framework
The evolution of the global crypto landscape
The geopolitical situation

FAQ: Understanding Russia's Crypto Strategy

Why is the Bank of Russia supporting cross-border crypto payments but not domestic trade?

The Bank of Russia's primary concern is maintaining control over its domestic financial system and preventing financial instability. Cryptocurrencies can be used in cross-border or international payments only if they don t get into Russia s domestic financial system, the Bank of Russia governor said. Russia sBy allowing cross-border crypto payments while restricting domestic use, it aims to benefit from the technology for international trade without undermining its monetary policy or exposing the domestic economy to excessive risk.

How will Russia prevent crypto from entering its domestic financial system?

The specific mechanisms are still under development, but the general idea is to create a regulated system where crypto is only used for transactions with foreign entities and is not allowed to circulate within Russia.This could involve strict monitoring of crypto transactions, licensing of crypto exchanges, and restrictions on the use of crypto for domestic payments.

What are the risks associated with Russia's approach to crypto?

The risks include the potential for money laundering and illicit activities, financial instability due to crypto volatility, regulatory uncertainty, and the possibility of further straining relations with other countries if crypto is used to circumvent sanctions.

What are the benefits of cross-border crypto payments for Russia?

The benefits include enhanced trade relationships, increased financial innovation, attracting foreign investment, and potentially mitigating the impact of international sanctions.

Could Russia eventually embrace domestic crypto usage?

While unlikely in the near future, a gradual shift towards a more accepting attitude towards domestic crypto usage is possible as the regulatory framework evolves and the benefits of cross-border crypto payments become more apparent.

Conclusion: A Calculated Gamble

The Bank of Russia's backing of cross-border crypto payments, while maintaining a firm stance against domestic crypto trade, represents a calculated gamble. Rosbank, one of Russia s major banks, is launching a facility enabling importers to settle transactions using crypto. While the Bank of Russia does not support the use of crypto within Russia for such payments, the Rosbank solution uses a startup crypto firm B-crypto to buy the crypto outside Russia and pass it on to the foreign supplier.Driven by the need to circumvent sanctions and facilitate international trade, Russia is venturing into the world of digital assets, albeit with caution.This move presents both opportunities and risks.Success hinges on establishing a robust regulatory framework, mitigating the potential for illicit activities, and carefully managing the inherent volatility of cryptocurrencies.The outcome of this experiment will not only shape the future of crypto in Russia but also offer valuable lessons for other countries navigating the complex landscape of digital finance.The key takeaways are that Russia is leveraging crypto to bypass international sanctions, focusing on international trade rather than domestic use, and cautiously exploring Ripple and CBDCs as potential solutions.As Russia trials this new approach, the world will be watching closely to see if it can successfully harness the power of crypto while safeguarding its financial stability.This is a developing story and, if you are interested in the latest on global finance and digital assets, stay informed about the evolution of cross-border crypto payments.