The Central Bank of Russia has relaxed some limitations for Russian banks selling U.S. dollars and euros to the public. The increased supply of foreign cash may affect the crypto market in the country as currency restrictions have been a driver of increased demand for digital coins.
Monetary Authority of Russia Expands Citizens’ Access to Foreign Cash
The Central Bank of the Russian Federation (CBR) has lifted one of the restrictions on the sale of U.S. dollars and euros in cash to private individuals imposed amid Western sanctions over the war in Ukraine, the Interfax news agency reported.
Until recently, Russians could buy only dollars and euros sold to the banks at their cash desks after April 9, 2022, by other physical persons. Now the CBR has allowed Russian lenders to sell the two convertible currencies if they are also obtained from other sources.
The regulator explained that these may include transactions with non-resident banks as well as foreign cash deposited by Russian legal entities. The adjustment will allow banks to increase the supply of cash dollars and euros, its press service said, noting that other restrictive measures will remain in place until March 9, 2023, as announced earlier this year.
In August, the Bank of Russia extended restrictions on U.S. dollar and euro cash withdrawals for another six months. At the moment, Russian banks are not limited in the sale of other foreign fiat currencies, the report notes.
Moscow’s decision to invade Ukraine in late February was met with harsh economic and financial sanctions introduced by the West. They have limited Russia’s access to global finances, including its foreign currency reserves.
Currency restrictions enforced by the CBR led to a spike in demand for crypto. Many Russians have been buying bitcoin, other cryptocurrencies, and stablecoins to use them for money transfers abroad, among other purposes. It remains to be seen how their loosening now will affect the local crypto market. A recent poll showed that close to a third of Russians are ready to buy coins in the next six months.
Do you think the easing of foreign cash restrictions will influence crypto demand in Russia? Share your thoughts on the subject in the comments section below.