Cuba is reportedly cooperating with Russia to create an international settlement system based around cryptocurrencies. The international settlements denominated in rubles would be used to evade sanctions both countries are under.
In order to circumvent international sanctions, Russia and Cuba are working together to use cryptocurrencies for international settlements in rubles.
Boris Titov, a representative of Russia, at the 38th International Multi-Sectoral Fair, or FIHAV-2022, which is now taking place in Havana made the announcement. The sanctions imposed on both nations, according to the Russian Presidential Commissioner for Entrepreneurs’ Rights, served as the foundation for the cooperation.
Titov stated that the “primary financial mechanism”—from which both nations are prohibited—for making foreign payments is the U.S. dollar. The Russian commissioner, though, claimed that governments in both nations were working on technologies that may work as a substitute.
“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.
After Cuba underwent the Cuban Revolution and became communist, the United States imposed an economic embargo on the island nation. Due to Russia’s invasion of Ukraine earlier this year, the West has imposed sanctions on it. These have successfully stopped Russia from taking part in the international financial system.
Russians Using Crypto for Settlements Amidst Financial Sanctions
In an effort to provide a framework for cryptocurrency settlements, Russia’s Finance Ministry drafted a bill on cryptocurrencies in September. The list of currencies and counterparty nations to be included in the settlement mechanism is provided in the draft bill on digital currency.
Ivan Chebeskov, of the Financial Policy Department of the Finance Ministry, described it by referring to it as a “instrument for business.” As a result, he claimed that businesses would largely determine the practical details surrounding the prospective settlement framework.