Russia is considering Trading with Africa using Central Bank Digital Currency and Crypto Currencies amid Western Sanctions

Russian Invasion

Should Russia settle cross-border settlements with African companies and countries using Central Bank Digital Currency and Cryptocurrencies? Well, an Executive at the Russian Chamber of Commerce thinks so and has even presented this proposal to the Russian Prime Minister. In a letter written by the Chamber of Commerce President Sergei Katyrin to the Russian Prime minister Mikhail Mishustin proposing developing cooperation with African countries in a bid to move to Africa amid several sanctions by Western Countries, the letter advocated the use of Central Bank Digital Currency and Cryptocurrencies as a part of settlements and payments. The Executive further elaborates on the need to establish special export and import trust funds to support small and medium enterprises and businesses in Africa. 

This move doesn’t shock many Africans, considering that most African countries are considering using or even using Russian Blockchain networks and are familiar with Russian-owned apps and cryptocurrencies. But from an African perspective, is Africa ready to receive payments from Cryptocurrencies and Central Bank Digital Currency? Well, it depends on which country Russian is willing to trade with.

Most African countries have banned the use of Cryptocurrencies among their citizens and have issued warnings against citizens who are found transacting in Cryptocurrencies, including financial institutions. Africans have also lagged in the innovation of crypto and P2P due to a lack of support from their governments. It could be a welcomed move considering countries such as Kenya, Rwanda, Nigeria, and South Africa are in very advanced stages or have already implemented Central Bank Digital Currency as Legal tender. Not to mention the number of Africans already trading in Cryptocurrencies as a medium of exchange for services done or goods delivered. With the Russian Invasion of Ukraine entering its second month, most African countries’ governments have stood on the sidelines or remained silent regarding their standpoint and views on the invasion. 

It resulted in countries such as the United States and the European Union calling for African countries through the African Union to “come out strongly” in terms of their response. A statement issued by the African Union stated that Africa was much more affected by the invasion economically, resulting in skyrocketing prices in basic commodities, fuel, and food and a threat to international integrity. But as Russia seeks a way to shield itself from the stringent suctions, African governments might not be as welcoming as expected. 

The effects of the invasion are being felt widely as most young African students had to return to their home countries. They cut short their education dreams due to the invasion, not to mention the daily rise of fuel prices and agricultural products and inputs, not forgetting the most important commodity, wheat. Regardless of how the African government will respond to this offer, Russia presents an opportunity for African countries to grow economically and technologically. Whether African governments will consider this offer and open up trading with Cryptocurrencies is a discussion for another day, but this is a once-in-a-lifetime opportunity for unlimited financial possibilities.

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