Russia and Cuba look to crypto-currencies for settlements amid sanctions

Both facing sanctions, Russia and Cuba are exploring alternative options for cross-border payments, including crypto-currencies, a Kremlin adviser in Havana has revealed. Moscow is already developing a crypto-currency settlement mechanism to circumvent financial restrictions imposed following its invasion of Ukraine.

Crypto and ruble considered for payments in Russia-Cuba trade.

The governments of Russia and Cuba are considering using Russian rubles and crypto-currencies to facilitate bilateral cooperation amid the sanctions imposed on both nations. The news comes from a statement by Boris Titov, commissioner for entrepreneurial rights to the Russian president, who visited Havana. The Russian business ombudsman arrived in the Cuban capital on the occasion of the 38th edition of the Havana International Fair.

“We are all, Cuba and Russia, under sanctions, the dollar turnover is the main financial mechanism that exists in the world for mutual settlements, but today mechanisms are developed at the level of national governments to change the situation“, said Titov to the Tass news agency.

He added that several options are currently being discussed, including ruble-based regulations. But the Kremlin official also noted that businesses are often quicker to adapt and find their own ways to make payments, including through cryptocurrencies and private clearing systems.

The Feria Internacional de la Habana (FIHAV 2022) takes place from November 14 to 18 at the Expocuba exhibition complex on the outskirts of the city and was organized in 1983. The event brings together representatives of companies from more than 60 countries, including Brazil, Venezuela, Spain, Italy, Canada, China, Mexico, Russia and France.

Russian authorities have been mulling over a more comprehensive regulatory framework for crypto-assets for months. Lawmakers in the State Duma are expected to consider a new draft law “On Digital Currency” and a bill “on mining in the Russian Federation“designed to fill the gaps that will remain after the law comes into force”on digital financial assets” in January 2021.

While in January of this year, the Central Bank of Russia suggested a blanket ban on most crypto-currency activities, the increasing pressure of sanctions since the launch of the “special military operation” by Russia in Ukraine in late February, convinced the monetary authority to support proposals to legalize the use of decentralized digital currencies in international settlements.

In September, Russian financial authorities began designing a mechanism to facilitate the use of crypto-currencies for payments with other nations. Earlier that month, Deputy Finance Minister Alexey Moiseev revealed that his ministry and the Bank of Russia had agreed that Russia “could not do without cross-border crypto payments“.