- Rosbank, one of Russia’s largest banks, is testing a crypto-based cross-border payments system.
- This new system could potentially allow Rosbank to bypass recent sanctions, according to Emet Law Firm’s senior partner, Eduard Davydov.
In a groundbreaking move, Rosbank, one of Russia’s leading financial institutions, is venturing into the crypto space by launching a new cross-border payments system utilizing digital assets.
As reported by Russian media outlet Vedomosti, a Rosbank representative stated that the bank is currently executing test transactions with both private and corporate clients. The specifics about which cryptocurrencies the bank plans to support for these cross-border payments are yet to be disclosed, however, Russian fintech consortium B-crypto will be entrusted with managing the technical aspects of this novel protocol.
To utilize this service, clients must first undergo a stringent KYC (Know Your Customer) verification process with both Rosbank and B-crypto, as per the report by RBC Group.
In the banking sector, the integration of cryptocurrencies for cross-border payments is usually observed among smaller institutions. Alexey Voylukov, Vice President of the Association of Banks of Russia, remarked that large-scale financial institutions have mostly steered clear of such services. Bank of Russia’s First Deputy Chairman, Vladimir Chistyukhin, also mentioned that cross-border crypto payments are not being considered as a complete solution to international transactions.
Late last year, the US Department of the Treasury imposed sanctions on Rosbank and its owner, Vladimir Potanin, reputedly the wealthiest man in Russia. These sanctions were part of a broader strategy to constrict Moscow’s capacity to finance its conflict with Ukraine.
Eduard Davydov, a senior partner at Emet Law Firm, speculates in the RBC Group report that Rosbank’s new cross-border payment system could potentially serve as a mechanism to evade these sanctions. This innovative use of cryptocurrencies may offer a glimpse into a future where digital assets play a key role in reshaping financial systems, particularly in scenarios where traditional monetary systems prove inadequate or restrictive.
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