- 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.
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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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