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Russia’s Tech Giant Rostec To Test Digital Asset Payments In International Trade

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Russia’s Tech Giant Rostec To Test Digital Asset Payments In International Trade

Russia’s leading technology company, Rostec, is working on a project to integrate digital assets into cross-border trade. The state-owned corporation says the market is interested in cryptocurrency payments which can reduce sanctions pressure on Russian exporters and importers.

Rostec Eyes Russky Island for Trials of Digital Currency Payments

The largest Russian industrial and technology conglomerate, Rostec, us preparing to launch a project dedicated to integrating cryptocurrencies into cross-border transactions. The main task will be to limit the negative effects of sanctions on the activities of Russian importers and exporters that are experiencing mounting pressure.

The Russian economy, especially foreign trade operations, was hit hard by financial restrictions imposed by the West over Moscow’s military intervention in Ukraine. Proposals to legalize the use of digital financial assets in deals with partners, including cryptocurrencies, stablecoins and the upcoming digital ruble, have been gaining support among officials.

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Speaking during the “Digital Finance: New Ways of Development” conference at the Eastern Economic Forum this week, Rostec’s Managing Director for National Projects Anna Sharipova unveiled that the corporation is exploring the possibility of testing digital assets as a means of payment for imports and exports. Trials will be held under the experimental legal regime for electronic trading on Russky Island, off the coast of Vladivostok, the second-largest city in the Russian Far East.

Quoted by the crypto news outlet Bits.media, the high-ranking executive said that the market is now extremely interested in introducing cryptocurrencies into international trade relations. Separated by borders, suppliers and consumers are looking to modern and efficient settlement systems in the face of various restrictions stemming from the sanctions, Sharipova elaborated. Rostec experts are currently developing a launch strategy for the project, supported by market participants and local authorities.

The news from Vladivostok comes after this week Deputy Finance Minister Alexey Moiseev unveiled that his department and the Central Bank of Russia have studied cryptocurrencies and reached a conclusion that the Russian government needs to legalize and regulate international payments in digital assets as soon as possible. The head of the Financial Market Committee at the State Duma, Anatoly Aksakov, also urged for the adoption of a relevant legal framework. Bank of Russia later indicated it intends to also promote its digital ruble for the same purpose.

In late August, Russian Prime Minister Mikhail Mishustin praised digital assets as a “safe alternative” that can ensure uninterrupted international payments. In July, the head of Russia’s financial watchdog, Rosfinmonitoring, Yuri Chikhanchin said that crypto payments are acceptable in foreign trade. In June, Rostec announced it had developed a blockchain-based alternative to the global payment messaging system SWIFT, from which a number of Russian banks were disconnected. The system is designed to facilitate the processing of international settlements and the storage of digital currency.

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conflict, Corporation, cross-border payments, Crypto, Cryptocurrencies, Cryptocurrency, Digital Assets, Digital Currency, digital ruble, international settlements, Payments, restrictions, Rostec, Russia, russian, Sanctions, Settlements, Stablecoins, tests, trials, Ukraine, War

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Do you expect Russia to soon start using digital assets in foreign trade? Share your thoughts on the subject in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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EU Bans Crypto Services For Russians In New Sanctions Over Ukraine Escalation

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EU Bans Crypto Services For Russians In New Sanctions Over Ukraine Escalation

An array of crypto-related services have been targeted in the latest round of sanctions on Russia approved by the EU. The measures are part of an expected tightening of the economic and financial restrictions in response to Moscow’s decision to annex Ukrainian territories.

EU Council Adopts Full Ban on Crypto Wallet and Custody Services for Russian Persons

The Council of the European Union announced new sanctions against Russia on the backdrop of the deepening military conflict in Ukraine. The penalties, expected to hurt the Russian government and economy, come after Moscow took steps to annex the Ukrainian regions of Donetsk, Luhansk, Zaporizhzhia, and Kherson.

In a statement, the EU’s High Representative for Foreign Affairs and Security Policy Josep Borrell emphasized that the sanctions are a response to the latest escalation with the “fake referenda” in these four oblasts. Russian individuals and entities that have played a role in their organization will be specifically targeted.

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Other Russian citizens and businesses are also going to take a hit, including those that deal with cryptocurrencies. The new measures include a full ban on the provision of wallet, account, or custody services for crypto assets to Russian persons and residents. That’s regardless of the value of these assets, according to the eighth package of sanctions imposed by Brussels.

This spring, when the EU approved its fifth round of such measures, the Council prohibited only the provision of “high-value” crypto-asset services to Russians and organizations registered in their country. The ban applied to digital funds exceeding €10,000 (close to $11,000 at the time).

New European Sanctions to Hit Russian Imports and Exports

While the earlier restrictions were meant to limit the transfer of wealth through digital assets and close other loopholes in the crypto space, a recent report revealed that pro-Russian groups have been actively using cryptocurrency, often in small transactions, to fund paramilitary operations in Ukraine. According to the research, they have raised $400,000 in crypto since the start of the invasion in late February. Russian authorities have also been working to allow businesses to employ crypto payments for international settlements.

With the latest move, the EU also bans the provision of IT consultancy and legal advisory services to Russia as well as architectural and engineering services. Russian imports and exports have been targeted, too, including the maritime transport of crude oil and petroleum products to third countries. The provision of related services will be allowed only if these have been purchased at or below a pre-established price cap, which is yet to be determined.

Among the other measures is a ban on EU nationals to hold any posts on the governing bodies of some Russian state-owned or government-controlled entities. The Council also decided to broaden the criteria under which persons can be designated as facilitating the circumvention of restrictions imposed by the European Union. The European Commission, the executive body in Brussels, welcomed the latest sanctions package.

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annexation, ban, conflict, council, Crypto, crypto services, Cryptocurrencies, Cryptocurrency, custody, escalation, EU, EU Council, european, European Union, Exports, imports, package, prohibition, referenda, referendums, regions, restrictions, round, Russia, russian, Sanctions, Services, Ukraine, Wallets, War

Do you think the new EU sanctions will significantly limit access to cryptocurrencies for Russians? Share your thoughts on the subject in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

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Pro-Russian Groups Raised $400,000 In Crypto Since Ukraine Invasion, Report Reveals

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Pro-Russian Groups Raised $400,000 In Crypto Since Ukraine Invasion, Report Reveals

Groups supporting Russia’s war effort in Ukraine have been actively collecting cryptocurrency to fund paramilitary operations and evade sanctions, researchers say. According to a new report, these organizations use Telegram to raise money then used to pay for equipment and training.

Paramilitary Groups Employ Cryptocurrency to Fund Russian Operations in Ukraine

Pro-Russian groups have reportedly raised a serious amount of cryptocurrency for Russia’s military activities in Ukraine, circumventing U.S.-led sanctions. According to a study carried out by the digital asset compliance and risk management firm TRM Labs, the total had reached $400,000 as of Sept. 22, CNBC reported on Monday.

The study unveiled that these organizations were using the popular encrypted messaging app Telegram to offer supporters options to send funds, which were later spent to purchase supplies for Russian-affiliated militia groups and pay for their combat training at locations near the Ukrainian border.

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One of these, Task Force Rusich, has been labeled by the U.S. Treasury as a “neo-Nazi paramilitary group that has participated in combat alongside Russia’s military in Ukraine.” The department’s Office of Foreign Assets Control (OFAC) has placed it under sanctions. It was trying to raise money for items such as thermal imaging equipment and radios on a Telegram channel.

Another group identified by TRM Labs, the Novorossiya Aid Coordinating Center, raised about $21,000 in cryptocurrency, mainly bitcoin (BTC), with the aim of buying drones, the report added. The organization was established in 2014 to support Russian operations in Ukraine.

The findings come amid mounting sanctions against Russia over its decision to attack Ukraine in late February, which have severely limited its access to the global financial system. The Russian government is now working to legalize crypto payments for international settlements in order to circumvent the restrictions.

Crypto Said to Lack Liquidity for Large-Scale Russian Transactions

While the crypto space may not have the sufficient liquidity Russia would need to move large sums of money, as experts have pointed out, it has enough to allow paramilitary groups to make transfers for the items they need to acquire. Ari Redbord, head of legal and government affairs at TRM Labs, elaborated:

They’re probably using non-compliant exchanges to off-ramp those funds… Of course, there’ll be more. But will it be billions of dollars? Highly unlikely.

To pinpoint the groups, TRM Labs used publicly available wallet addresses and cross-checked other websites and online activity. Redbord remarked, however, that it’s not possible to establish with certainty whether they were working with the Russian government.

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“I think an interesting part of this story is that crypto is just a form of payment in these cases. It’s a way to move funds. And there’s an example of it being used for good and example of it being used for bad in this context,” the executive added. Ukrainian volunteer groups and government have been also relying on crypto donations to fund their defense and humanitarian efforts.

The latest research on the topic comes after, earlier this year, a report by blockchain analytics firm Chainalysis identified 54 pro-Russian groups that had collectively received over $2.2 million in various cryptocurrencies. Although most of the crypto funds were sent to several of these organizations, the rest had received considerable amounts as well, the company said.

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conflict, Crypto, Crypto Donations, Cryptocurrencies, Cryptocurrency, fund raising, Funds, Groups, invasion, operations, organizations, paramilitary, Russia, russian, transactions, Ukraine, ukrainian, War

Do you think groups on both sides in the conflict in Ukraine will continue to raise funds in cryptocurrency? Share your thoughts on the subject in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Latest EU Sanctions To Restrict Russians’ Access To Crypto Services In Europe, Report Unveils

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Latest EU Sanctions To Restrict Russians’ Access To Crypto Services In Europe, Report Unveils

New sanctions discussed by EU member states amid the current escalation of the conflict in Ukraine are going to restrict European crypto services for Russians. Reports about the tightening have come after earlier this year the Union banned only “high-value” crypto-asset services to Russian residents and companies.

EU Expected to Target Crypto Services for Russians in New Round of Sanctions Over Ukraine

The European Union is preparing to punish Russia with more sanctions over its decision to announce partial mobilization as part of its escalating military intervention in Ukraine and moves to annex occupied Ukrainian territories through what are seen as sham referendums.

The package will hit trade in the first place, with European Commission President Ursula von der Leyen announcing intentions to impose a new ban on Russian imports as well as the export of technologies that could be employed by the Russian military. A price cap for Russian oil is planned, too.

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The new measures would also aim to further restrict the ability of Russians to transfer wealth using digital assets like cryptocurrencies, according to Bloomberg quoting a knowledgeable source. Brussels wants to prevent European companies from providing crypto wallet, account, or custody services to Russian citizens and entities, the report reveals.

Jewelry and precious stones are also on the list, the person added, asking not to be identified as the proposal is still confidential. It also suggests cracking down on people who try to circumvent the sanctions, aims to ban EU nationals from holding high-paying roles in Russian state-owned companies, and to punish individuals and entities involved in staging the recent referendums in Ukraine.

Cryptocurrencies were targeted in sanctions introduced this spring, the fifth round of such measures approved by the EU Council, designed to narrow existing loopholes in the crypto space. At the time, the European Union prohibited the provision of “high-value” crypto-asset services to Russian entities and residents. The restrictions applied to digital funds exceeding €10,000 (now $9,803).

Since Moscow launched in late February a full-scale military invasion of neighboring Ukraine, which has been granted the status of a candidate for EU membership, the 27-strong bloc has adopted multiple packages of sanctions against the Russian Federation. For each to be enforced, the unanimous approval of all member states is required.

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ban, conflict, Crypto, crypto assets, crypto services, Cryptocurrencies, Cryptocurrency, custody, escalation, EU, european, European Union, mobilization, prohibition, referendums, restrictions, Russia, russian, Sanctions, Ukraine, ukrainian, Wallet, War

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Do you expect the European Union to expand the restrictions on crypto services for Russians and Russian companies? Tell us in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

Advertisement

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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