Rosbank Set to Offer Cross-Border Crypto Payments
- Rosbank has become the first major bank in Russia to offer settlement of cross-border payments in cryptocurrencies.
- The bank has partnered with fintech firm B-crypto for the new solution.
- A Russian firm needs to confirm its wallet, the receiver’s address, and the amount, along with completing the KYC process.
- The remitter will deposit fiat with Rosbank, and the bank will send funds to B-crypto, which will send crypto to the remittee.
Following the imposition of sanctions by the European Union (EU) and the United States, Russia has become more receptive to cryptocurrencies and blockchain technology, despite trying to ban them completely in the country in 2021. However, crypto payments are still banned in the country. Nevertheless, Rosbank, the third most reliable Russian bank in 2021, as per Forbes Russia, has plans to offer cross-border crypto payments via a solution that involves a fintech intermediary who buys cryptocurrency abroad at the expense of the importer and transfers it to a foreign supplier.
As per a report from the Russian business journal Vedomosti, Rosbank is the Russian Federation’s first prominent banking institution to offer a cross-border payment solution that would deal with cryptocurrencies. Moreover, the bank stated that the new solution introduced by the Russian bank is in strict compliance with existing legislative requirements put forth by the Central Bank’s guidelines and the bank’s own compliance policy.
In order to implement the strategy, the bank has also announced a collaboration with Russian fintech service B-Crypto, which is responsible for the integration of the technical solution that enables customers to initiate cross-border payments using cryptocurrencies. While crypto payments are not allowed, sending remittances beyond borders via crypto is not a very easy task either.
Russian companies that aim to pay for imported goods or services via cryptocurrencies need to first make arrangements with the supplier and confirm the wallet using which they will process the payment. Next, the supplier will issue an invoice for the payment, which will include the amount due in terms of crypto along with the receiving address.
However, the first process that a Russian company needs to go through is the KYC (Know Your Client) verification at Rosbank and at B-crypto to gain exposure to the new services of the leading Russian bank.
After the confirmation of the recipient’s address and the amount to be sent in crypto, the importer and B-crypto sign an agreement according to which the customer needs to deposit fiat funds for the purchase of cryptocurrency into an account with Rosbank and leaves an application for the same. The bank then transfers the funds to B-crypto, which in turn buys cryptocurrency in friendly countries and transfers it to a foreign supplier.
Commenting on these new services initiated by Rosbank, the vice president of the Association of Banks of Russia, Alexey Voylukov, said that “cross-border cryptocurrency transfers are a business of small banks, and such services have not yet been encountered among large credit institutions.” He believes that the largest banks in the country are not interested in cross-border remittances via cryptocurrency due to the lack of cryptocurrency liquidity necessary to service the operations of large clients.
Interestingly, the First Deputy Chairman of the Bank of Russia, Vladimir Chistyukhin, stated that it is not possible for cryptocurrencies to become the panacea for cross-border payments but added that everything must be done to use any means of settlement with foreign partners.
It is important to note here that a bill to legalize cryptocurrency mining and the experimentation laws associated with it is being discussed in the State Duma, the lower house of the Federal Assembly of Russia. With this bill, the Central Bank of the country will start testing cross-border payments in cryptocurrency mined by miners through authorized organizations.
As reported earlier by BitcoinWisdom, the former President of Russia, Dmitry Medvedev, believes that the US dollar and euro will be replaced by digital currencies, adding that in 2023 the world will witness the crash of the International Monetary Fund (IMF) and the World Bank.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
