The increase in the supply of foreign cash could have an impact on the crypto-currency market in the country, as currency restrictions have been a driver of the increase in demand for digital coins.
Russia’s monetary authority is expanding citizens’ access to foreign cash.
The Central Bank of the Russian Federation (CBR) has lifted one of the restrictions on the sale of U.S. dollars and euros in cash to individuals imposed as part of Western sanctions related to the war in Ukraine, the Interfax news agency reported.
Until recently, Russians could only buy dollars and euros sold to banks at their counters after April 9, 2022, by other natural persons. Now the CBR has allowed Russian lenders to sell the two convertible currencies if they are also obtained from other sources.
The regulator explained that these can include transactions with non-resident banks as well as foreign cash deposited by Russian legal entities. The adjustment will allow banks to increase the supply of dollars and euros in cash, its press service said, noting that other restrictive measures will remain in place until March 9, 2023, as announced earlier this year.
In August, the Bank of Russia extended restrictions on cash withdrawals in U.S. dollars and euros for six months. For now, Russian banks are not restricted in selling other foreign fiat currencies, the report notes.
Moscow’s decision to invade Ukraine in late February was met with severe economic and financial sanctions introduced by the West. These sanctions have limited Russia’s access to global finance, including its foreign currency reserves.
The currency restrictions enforced by the CBR led to a spike in demand for crypto. Many Russians have purchased bitcoin, other crypto-currencies and stablecoins to use for overseas money transfers, among other things. It remains to be seen how their relaxation now will affect the local crypto market. A recent survey showed that nearly a third of Russians are ready to buy coins in the next six months.