One of the biggest banks in Russia, Rosbank, is launching a new cross-border payments system that makes use of cryptocurrency assets. Vedomosti claims that the bank has already begun testing the new protocol’s technical details with both individual and business clients. B-crypto is a Russian fintech company.
Although the specific digital assets that the bank supports for cross-border payments have not been made public. Customers interested in the services must undergo a comprehensive KYC verification process with Rosbank and B-crypto. The RBC Group report highlights the requirement for thorough customer verification.
Smaller banks often offer cross-border payment services focused on cryptocurrencies, according to Alexey Voylukov, vice president of the Association of Banks of Russia. It also highlighted in the study that larger institutions have not yet widely adopted such solutions.
Vladimir Chirstyukhin, the first deputy chairman of the Bank of Russia, highlighted that cross-border payments are not meant to replace conventional payment systems but rather to serve as an extra choice for international transactions.
To limit Moscow’s capacity to finance its fight with Ukraine, the US Department of the Treasury sanctioned Rosbank and its owner, Vladimir Potanin, in late 2022. Eduard Davydov, senior partner at Emet Law Firm, suggests that Rosbank may evade penalties using the cross-border payment mechanism. The mechanism offers a potential loophole for the bank to circumvent the imposed penalties. This offers a potential solution for the bank to navigate the imposed penalties.
With Rosbank venturing into cryptocurrency-based cross-border payments, this step underscores the traditional banking industry’s rising interest. Also, it embraces digital assets, creating new opportunities for efficient and secure international transactions.