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Experts explained why international settlements in cryptocurrencies will not be a way out of the current situation, and what solutions exist for this
In Russia, the development of a mechanism for international settlements in cryptocurrency has begun. In connection with the increased sanctions pressure from the West, the government instructed the Ministry of Finance, the Central Bank and other departments and regulators to quickly develop standards for the issuance, circulation and operations in digital currencies for settlements with other countries.
The US authorities continue to tighten the sanctions policy. This week, the US House of Representatives approved a bill that provides for measures aimed at curbing the use of cryptocurrencies to circumvent anti-Russian sanctions.
Experts told RBC-Crypto how realistic it is to circumvent the sanctions pressure of the US authorities in the field of cross-border settlements using cryptocurrencies
Not the first time
The possibility of introducing a payment system with cryptocurrencies under the sanctions seems to be a big illusion, says exmo.com development director Maria Stankevich. She recalled that back in 2014, at the time of the imposition of sanctions, settlements using cryptocurrency were actively discussed at many enterprises with state participation as an alternative to traditional investment instruments.
According to the expert, even then it seemed to many that in the event of a real threat of freezing deposits, it would be much more profitable to transfer funds into cryptocurrencies and thus quickly and safely withdraw them from the country.
Mikhail Zhuzhzhalov, senior lawyer at Tomashevskaya & Partners, agreed that the idea of removing sanctions obstacles with the help of cryptocurrencies is not new. He noted that in 2018, the permission to use cryptocurrency settlements by international companies established in the territories of special administrative regions (SAR) was also considered. However, then the amendment did not overcome the negative attitude of regulators towards cryptocurrency, the expert explained.
The circulation of cryptocurrency, by its very nature, is not regulated by anyone, since there is no central holder who could block or correct entries in the blockchain, says Zhuzhzhalov. Therefore, regulatory pressure is exerted on the institutional participants of the crypto market – crypto exchanges, P2P platforms, tokenizing platforms, issuers of digital assets, the lawyer explained.
He noted that since many participants in the crypto industry operate in various countries of the world and can instantly appear and leave the market, it is not easy to put pressure on them. At the same time, the expert drew attention to the fact that it is easy to put pressure on legalized market participants, since they all have certain permissions or statuses: as a rule, these are licenses or the status of a participant in some kind of sendbox (a platform on which projects are developed ).
“If such market participants are subjects of unfriendly jurisdictions, they are obliged to comply with the sanctions. And if they are located in neutral countries, then they may be pressured by secondary sanctions, as was recently the case with Turkish banks,” Zhuzhzhalov said.
There are definitely no options to hide large volumes of transactions, Maria Stankevich is sure. Therefore, everyone who still works with Russia using cryptocurrencies will simply be sent under sanctions. And those wishing to continue such work will noticeably decrease, the expert believes.
Now there are already difficulties with replenishing wallets on crypto-exchanges, said Alexander Sharapov, a lawyer at KSK GROUP. According to him, the US authorities may put pressure on trading platforms and banks, introduce a complete ban on replenishment of exchange wallets from Russian accounts and from Russian citizens. At the very least, this may apply to platforms registered in the United States or having accounts in American banks.
There is no possibility of pressure on individuals if the purchase and sale of cryptocurrency is carried out for cash, says Sharapov. However, the lawyer pointed out that in this case, the cryptocurrency may not be accepted for payment by some market participants, since its origin cannot be established from the person making the payment.
Such payments will fall into the gray zone, since it is not known under what circumstances the cryptocurrency was purchased, as well as for what services the payment was made, the expert specified. In addition, cryptocurrency received from a wallet owned by a Russian citizen will most likely not be able to be converted into fiat currency, he added.
The next step for Russia could be the creation of an independent participant in the crypto market, but such a participant is likely to be quickly included in the sanctions lists and pressure from secondary sanctions will continue, Mikhail Zhuzhzhalov believes.
However, he is of the opinion that it is unlikely that Russia will allow the official creation of such a subject. Most likely, a subject from a neutral, but located country to Russia, will be used, the expert believes.
He also noted that much will depend on technologies that allow hiding transactions (mixers). American security agencies have long learned to track the sources of cryptocurrency receipts into accounts, having gained this experience mainly in the fight against drug trafficking, the lawyer explained.
Tracking cryptocurrency transactions is even easier than bank transfers, Stankevich added. Of course, there are some loopholes, but the same loopholes exist in bank transfers, where there are even more of them, the expert says.
“In the current conditions, you just have to accept that interaction with the West will be limited,” the specialist concluded.
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