Transfers between Russia and Kazakhstan fell 12-fold after EU sanctions

The volume of money transfers between Russia and at least two neighbouring countries — Kazakhstan and Georgia — dropped sharply after the European Union imposed sanctions on the operator of the Zolotaya Korona payment system in late July.

According to RBK, which reviewed regulatory statistics from Kazakhstan and Georgia, transfers from Russia to Kazakhstan fell by roughly twelve times. A similar trend, the outlet reported, has been observed in Georgia, though the scale of the decline there has not been specified.

Consequences of the sanctions

The sanctions against Zolotaya Korona curtailed the system's ability to process cross-border payments, directly affecting one of the popular channels for money transfers between Russia and the region's countries, used by both private individuals and labour migrants.

The sharp fall in transfer volumes could affect households that depend on remittances from Russia, and push market participants to seek alternative means of sending money, including less formal channels.

The data from Kazakhstan and Georgian regulators cited by RBK captures the situation in the period following the imposition of sanctions; further developments will depend on whether payment system operators find new ways to conduct cross-border transactions under the constraints.