Russian Agricultural Bank Considering Cryptocurrencies in Grain Trade Settlements

The Russian Agricultural Bank (RusAg) is considering using cryptocurrencies for settlements in grain trading, the bank has stated. RusAg first deputy CEO Irina Zhachkina said that “We believe that cryptocurrencies could be a convenient alternative instrument, and we are now exploring the possibility of using cryptocurrency instruments for settlements in grain trading with the Bank of Russia and all interested parties.”

The Central Bank of Russia had earlier announced on May 28 that financial institutions can offer qualified investors derivative financial instruments, securities, and digital financial assets with returns pegged to the value of cryptocurrencies. The key condition is that such instruments must not involve the actual delivery of cryptocurrencies.

The Russian Agricultural Bank is a 100% state-owned bank regulated by the Bank of Russia. RusAg provides lending support to Russian agribusiness companies to assist them in growing crops. Russia is one of the world’s leading grain exporters and assists many countries with their food imports. However, the bank has been fully sanctioned by the United States, the European Union, and the United Kingdom and disconnected from the SWIFT international payments system.

Difficulties resulting from the West’s actions have resulted in the bank looking to G2G direct measures to continue global supplies and payments for these. Using cryptocurrencies is one mechanism that operates outside the remit of sanctions and, over time, will probably become a globally preferred payment mechanism, ultimately making SWIFT largely redundant.

As of the end of June last year, the bank’s loan portfolio (before provisions) reached ₽3.851 trillion (US$49 billion). Additionally, the bank’s equity has also significantly improved, reaching ₽306.7 billion (about US$4 billion) as of June 30, 2024.