June 13, 2024

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Russia and Cuba are cooperating in utilizing cryptocurrencies for international settlements in rubles in order to skirt international sanctions.

Russian representative Boris Titov made the announcement at the 38th International Multi-Sectoral Fair, FIHAV-2022, taking place in Havana this week. The Russian Presidential Commissioner for Entrepreneurs’ Rights highlighted the sanctions on both countries as the basis for the collaboration.

Two Countries Economically Isolated

The United States placed an economic embargo on Cuba in 1962, after the country became communist during the Cuban Revolution.

Meanwhile, Russia has come under sanctions from the West due to its invasion of Ukraine earlier this year. These have effectively prevented Russia from participating in the global financial system.

Titov acknowledged the U.S. dollar as the “main financial mechanism” for making international payments, from which both countries are barred. However, the Russian commissioner said that both countries’ governments were developing technology that could serve as an alternative.

“I know that several options are under consideration, including [payments] in rubles,” he said. “The issue of mutual payments in cryptocurrencies and the possibility to pay through clearing mechanisms and private mechanisms are also being discussed,” Titov added.

Crypto Settlements in Russia

In Sept., Russia’s Finance Ministry drafted a bill on cryptocurrencies in an effort to create a framework for crypto settlements. The draft bill on digital currencies outlines a list of currencies and counterparty countries to include in the settlement framework.

However, Ivan Chebeskov, of the Finance Ministry’s Financial Policy Department, described it as rather a “mechanism for business.” Consequently, he said that businesses would largely determine the practical details surrounding the prospective settlement framework. 

Chebeskov later reported a rise in the volume of transactions through this mechanism, but neglected to mention the participating companies.

The head of Russia’s Chamber of Commerce Vladimir Gamza said that businesses mainly used cryptocurrencies for transactions with “unfriendly” countries. These included Norway and Singapore, in addition to the United States and Ukraine.

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