Rosbank, one of Russia’s leading banks, is launching a facility that allows importers to settle transactions using cryptography. While the Bank of Russia does not support the use of cryptocurrencies within Russia for such payments, Rosbank’s solution uses a startup B-crypto cryptocurrency firm to purchase the cryptocurrencies outside of Russia and pass them on to the foreign provider. Therefore, it claims to be compatible with the regulations.

Legislation is currently in progress to update the rules for digital assets so that they can be used for cross-border payments. However, this relates to digital financial assets (DFAs), not cryptocurrencies. DFA assets are real-world tokenized assets, such as metals or trade credit assets.

There is a connection between the crypto initiative and ongoing legislation. Rosbank was a subsidiary of Societe Generale until it was sold after the Russian invasion of Ukraine. It is now owned by an entity controlled by Vladimir Potanin.

It also controls metal company Nornickel, which started Atomyze, the first Russian company to tokenize metal assets as digital financial assets last year. Atomyze has been working on the concept of metal tokenization since 2020. The sooner the legislation is passed, the sooner metal tokens will be used for cross-border payments.

One view is that the processes Rosbank is going through for cryptocurrencies could overlap with the use of tokenized metal assets and give it an advantage.

According to Vedomusti, a foreign provider of goods must specify in the contract that it supports such payments and provides a crypto wallet. Once there is a signed contrast, the importer and B-crypto sign an agreement, and the client deposits money in Rosbank and sends an instruction to buy crypto.

The bank sends the money to B-crypto, which then buys cryptocurrency from a foreign cryptocurrency exchange in a friendly country and transfers it to the provider. The importer has to go through KYC with both the bank and B-crypto, which is still operating in pilot mode, having been established in late 2022.

In other related news, Russia’s central bank digital currency (CBDC) bill was recently updated to allow foreign access. He sees CBDC as another way to avoid penalties.

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