Russia set to trial crypto for trading goods with military applications: report

The Russian government has created a focus group to trial crypto payments in foreign trade, focusing on importers of goods with potential military applications.

Russia has set up a focus group under an experimental legal regulation to investigate the use of crypto in foreign trade payments, Russia’s Vedomosti newspaper reported on September 17. The initiative reportedly aims to address challenges faced by importers dealing with dual-use goods that have both civilian and military applications and are subject to strict international payment restrictions.

The move comes after China announced in early August that it would ban the export of all unregulated civilian drones, which have been increasingly used in military warfare in recent years, starting September 1.

The report noted that the focus group included members of the Russian Chamber of Commerce and Industry and the Association of Electronics Manufacturers and Developers, as well as many banks, but did not specify whether the group included only Russian banks or foreign financial institutions as well.

The initiative is designed to help importers who have difficulty making transactions with banks in China and other countries due to the sensitive nature of their goods. The move comes after recent reports that Russia’s two largest sanctions-free metals producers have begun using Tether’s (USDT) stablecoin for cross-border transactions with Chinese customers and suppliers in response to the US Treasury Department’s warnings about secondary sanctions.

Now, people familiar with the matter are reported to be saying that participants in the focus group were selected based on their turnover, with priority given to larger companies. The Russian government plans to expand the initiative in the future, but the timing for wider implementation remains unclear.

Earlier in July, Russia’s central bank deputy governor Alexei Guznov stated in a media interview that the Bank of Russia was exploring the legalization of stablecoins for cross-border transactions. Guznov noted that the initiative could evolve from a temporary experiment into a permanent regulatory framework, but details on the timeline for approval were not disclosed.