The Russian central bank called on companies to use “multiple choice solutions,” including cryptocurrencies and other digital assets, to facilitate payments with foreign partners to counter Western sanctions imposed over the Ukraine conflict.
Russia’s booming trade with China, India, the United Arab Emirates, Turkey and other countries that have not imposed sanctions has suffered severe setbacks in recent weeks.
Recent Western sanctions targeted major Russian financial institutions, including the Moscow Stock Exchange and Russia’s national alternative to the global payment system SWIFT.
Elvira Nabiullina, governor of the Central Bank, acknowledged that payment problems are one of the biggest challenges facing the Russian economy.
“New financial technologies create opportunities for systems that did not exist before. That is why we have softened our stance on the use of cryptocurrencies in international payments and allowed the use of digital assets in such payments,” Nabiullina said at a financial conference in St. Petersburg.
“Various alternatives are being discussed. Companies have become very flexible and enterprising. They find solutions and often don’t even share them with us,” she said.
Nabiullina said Russia’s business partners in various countries are under “enormous pressure”. At the same time, however, she stressed that a new global payment system will gradually emerge without the involvement of Western institutions, as many countries feel vulnerable when using only one international payment system without alternatives.
Nabiullina said Russia and other BRICS countries are currently holding talks on the BRICS bridge payment system, which aims to bridge the financial systems of member countries.
However, she added that discussions were difficult and that creating such a system would take some time.
Andrei Kostin, head of Russia’s second-largest bank VTB, whose Shanghai branch was recently sanctioned, and who was sitting next to Nabiullina, said that all information on mechanisms for facilitating international payments should be declared a “state secret” by law because of their sensitivity.
“I can see very clearly that right now there is a second secretary sitting somewhere in the US embassy writing down every public statement we make. Maybe he is even sitting here. Whatever we do, we can see that the reaction (from Western countries) is very rapid,” he said.
