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Sanctioned Russian Business Union Considers National Bitcoin Fund
The authorized Russian business association considers a national Bitcoin fund to improve the use of digital financial resources in foreign trade.
The Russian Union of Industrialists and Entrepreneurs (RSPP), a licensed Russian trade union representing the country’s richest business figures, is considering launching a national cryptocurrency fund to use cryptocurrencies in foreign trade , as Russian companies evaluate options to circumvent Western sanctions.
In a interview with the Russian newspaper Vedomosti, the general director of financial policy and financial markets at RSPP Andrey Lisitsyn said that the fund will be based on Bitcoin (BTC) produced by local miners. Russia would then issue digital financial assets (DFA) – essentially centralized digital tokens – backed by this fund, allowing the cryptocurrency to be used legally in cross-border IOU transactions rather than directly exchanging the cryptocurrency itself.
So far, DFAs have failed to gain traction in Russia, despite efforts by several banks to attract retail investors. Although the president of the Bank of Russia, Elvira Nabiullina, seems to be bet big about DFA, you admitted in a press conference in early June, the market suffers from a lack of liquidity, noting that it is “too fragmented”. In June, the total volume of the DFA market passed 96 billion rubles (about $1.1 billion), a milestone that took the country two years to reach.
Lisitsyn explained that cross-border transactions could be conducted through claims on the underlying cryptocurrency in the form of IOUs, preventing its circulation and avoiding speculative demand since cryptocurrency is banned in Russia as legal tender. He added that the fund could be established in a special administrative region, allowing miners to open accounts and deposit mined bitcoins.
However, Lisitsyn admitted that the plan would require setting up multiple accounts on various global cryptocurrency exchanges to facilitate foreign trade, raising a “significant question” about whether those accounts would be blocked. To address the issue, he proposed creating a network of “payment agents,” though he did not elaborate on the details.
U.S. Department of the Treasury Office of Foreign Assets Control (OFAC) sanctioned RSPP in August 2023, stating that “Russian elites should free themselves from the idea that they can continue to carry on with their business as usual while the Kremlin wages war on the Ukrainian people.”