Source: AdobeStock / scaliger
In a sign of increased acceptance of cryptocurrencies among Russia’s elite, Alexander Shokhin, the president of the lobby group Russian Union of Industrialists and Entrepreneurs (RSPP), has proposed that the country’s lower chamber of parliament, the State Duma, discusses how Moscow could use cryptocurrencies to bypass Western sanctions.
Shokhin suggested that cryptocurrencies could be used to dodge US sanctions in a similar way to how European countries have used the Instrument in Support of Trade Exchanges (INSTEX) system since 2019 to facilitate their trade with Iran, as reported by the Moscow-based Prime news agency.
Speaking to lawmakers during the parliamentary hearings on the latest Western sanctions on Russia, Shokhin said the State Duma should “not be very afraid of cryptocurrencies, because for many companies under sanctions regimes, the use of cryptocurrencies is, perhaps, a natural way to bypass relevant restrictions”.
Last March, in a move coordinated with the European Union, the US imposed sanctions on senior Russian officials following the poisoning of opposition leader Alexei Navalny who is imprisoned.
Shokhin named the INSTEX mechanism as a “good example” of a way to override sanctions, but admitted the system “may have not yet fully proved its effectiveness, how to deal with the […] anti-Iranian sanctions imposed by the United States”.
Shokhin’s voice on cryptocurrencies might resonate with Russian decision-makers, as he is a political insider with a track record of senior government positions and close ties to the ruling elite. In the 1990s, he served as the Deputy Prime Minister, First Deputy Chairman of the State Duma, Minister of Labor and Social Security, and Minister of the Economy, among others. Shokhin also sits on the Supreme Council of the country’s ruling United Russia party.
The latest proposal comes shortly after Alan Lushnikov, the owner of Kalashnikov, the creator of the AK-47 assault rifle, said that the firm wants to uncouple from the SWIFT international payments network and banking sector-controlled payments by making use of “digital currencies”.
Set up in 1990, the RSPP comprises about 130 industry and regional associations of Russian companies, representing some of the country’s largest businesses. These include Aeroflot, Russian Railways, VTB Bank, Norilsk Nickel, and MegaFon, among others.