Russia’s RSPP Contemplates National Bitcoin Fund for Trade

Russia’s sanctioned business association is considering a national Bitcoin fund to enhance the use of digital financial assets in foreign trade.

The Russian Union of Industrialists and Entrepreneurs (RSPP), representing some of the country’s wealthiest business figures, is contemplating the launch of a national crypto fund. This initiative aims to utilize crypto in foreign trades as Russian businesses seek alternatives to circumvent Western sanctions.

In an interview with a Russian newspaper, Andrey Lisitsyn, managing director of financial policy and financial markets at RSPP, mentioned that the fund would be based on locally mined Bitcoins (BTC). Russia would then issue digital financial assets (DFAs) backed by this fund. These DFAs would enable the legal use of cryptocurrency in cross-border transactions through IOUs, rather than direct trades with the crypto itself.

Despite efforts by multiple banks, DFAs have not gained significant traction in Russia. Bank of Russia Chair Elvira Nabiullina acknowledged in a June press conference that the market suffers from a lack of liquidity, describing it as “too much fragmented.” As of June, the total market volume of DFAs surpassed 96 billion rubles (approximately $1.1 billion), a milestone achieved over two years.

DFAs have not gained significant traction in Russia despite efforts by multiple banks to woo retail investors.

Lisitsyn explained that cross-border trades could be conducted through claims to the underlying crypto in the form of IOUs. This approach prevents its circulation and avoids speculative demand, as crypto 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 noted that the scheme would require setting up multiple accounts on various global crypto exchanges to facilitate foreign trade. This raises a significant question about the potential for these accounts to be blocked. To address this, he proposed creating a network of “payment agents,” though he did not elaborate on the details.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the RSPP in August 2023, stating, “Russian elites should disabuse themselves of the notion that they can operate business as usual while the Kremlin wages war against the Ukrainian people.”

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