Kremlin launches massive missile strike; Russia close to starting crypto payments trial

Russia was close to starting trials of cryptocurrency exchanges and the use of digital tokens for cross-border transactions to help ease payment difficulties for companies in the country, which has been hit by international sanctions.

European natural gas erased an earlier decline after Russia said it attacked gas-compressor stations in western Ukraine with drones and missiles.

Russia hits Ukraine with more than 100 missiles targeting energy

Ukraine said Russia fired more than 100 missiles and nearly as many drones at cities across the country on Monday in a massive attack against power infrastructure that caused blackouts and left at least three people dead.

The energy sector sustained significant damage, President Volodymyr Zelensky said in a post on the X social media network, calling the strike one of the largest since the Kremlin’s invasion of his country began more than two years ago.

Russia has been stepping up efforts to knock out Ukraine’s civilian infrastructure, including power, heating and water supplies, ahead of winter. The latest attack came as Kyiv continued its incursion in the Kursk region of Russia, which caught Moscow off-guard and prompted tens of thousands of residents to flee their homes.

Russia’s defence ministry said on Monday it targeted gas compressor stations in western Ukraine as well as electric substations and air missile storage sites across the country.

The attacks affected 15 of Ukraine’s 27 regions, Foreign Minister Dmytro Kuleba said in a post on X, including the capital of Kyiv and the western Lviv region near the border with Poland. The capital’s hydro-power plant was among the targets. Emergency power and water supply cuts were imposed in Kyiv.

The barrage prompted Zelensky to again call on Ukraine’s Western allies to remove limits on the use of long-range weapons to hit military targets inside Russia and deliver more air defences and missiles.

“Our defenders cannot be restricted in their weapons when Russia deploys its entire arsenal, including ‘Shaheds’ and ballistic missiles from North Korea,” he said in the post. “America, Britain, France and our other partners have the power to help us stop this terror.”

One of the Russian drones entered Polish airspace early on Monday and disappeared from radar about 25km deep into its territory. A search operation was on to find the object.

Polish and Nato jets were scrambled to safeguard the country’s airspace, the air force said on X, describing the attack as the most intense affecting Western Ukraine since 8 July.

Lviv’s regional governor, Maksym Kozytskyi, warned missiles were approaching Stryi where gas transmission systems and storage infrastructure are located. An air raid alert, which started after midnight, was continued in about half of Ukraine after a brief intermission.

The northwestern city of Lutsk, which has rarely been a target of attacks, was also affected, and a residential house was damaged, said Mayor Ihor Polishchuk. At least three people were killed in the attack, according to local governments.

“The desire to destroy our energy will cost the Russians dearly,” Andriy Yermak, the head of Zelensky’s office, said on Telegram on Monday.

Several districts in Kyiv remained without power and water supply amid the attack due to the “situation in the country’s energy system”, the city’s mayor, Vitali Klitschko, said on Telegram.

Kozytskyi also said that the power supply was interrupted in the Lviv region.

Ukraine’s grid operator imposed urgent power cuts, the country’s energy minister, German Galushchenko, said on Facebook. “The situation is difficult, and consequences of the attack are being assessed.”

Meanwhile, the Russian defence ministry said 20 Ukrainian drones attacked targets overnight in several central regions of Russia. Two multistorey apartment buildings in the cities of Saratov and Engels were hit during the strike, according to Saratov regional Governor Roman Busargin. Several people were injured, he said.

Russia close to starting trials of crypto payments, exchanges

Russia was close to starting trials of cryptocurrency exchanges and the use of digital tokens for cross-border transactions to help ease payment difficulties for companies in the country, which has been hit by international sanctions.

The trials would start on 1 September, said two people with knowledge of the matter who asked not to be named for discussing private information. Russia would use the National Payment Card System for swapping between roubles and cryptocurrencies when testing payments and the exchange platform, they said.

Russia’s parliament in July passed Bills legalising crypto mining and a framework to allow the testing of digital tokens for cross-border payments under supervision by the central bank. President Vladimir Putin signed the Bills into law on 8 August.

The experiment with crypto comes as Russian businesses face growing obstacles in paying overseas suppliers and getting paid for exported commodities. Those challenges stem from a US move in June that widened the parameters for determining whether to impose sanctions on foreign banks working with Russia.

As recently as January 2022, just weeks before Russia’s full-scale invasion of Ukraine, the central bank proposed a blanket ban on the use and creation of cryptocurrencies.

Read more: Russia races to legalise crypto as sanctions weigh on firms 

Finance Minister Anton Siluanov said on 14 August at a forum that authorities were looking for ways to legalise crypto exchanges, according to the state-run Tass news agency. “We haven’t found a solution yet on how to do this,” he said.

The National Payment Card System was created by the central bank in 2014 and currently operates Mir cards and Russian instant interbank payment systems. Officials picked the network for the crypto-exchange tests because it already features infrastructure for functions like interbank settlement and clearing, the people said. It is also fully regulated by the central bank.

Europe gas futures rise after Russia attacks Ukraine compressor points

European natural gas erased an earlier decline after Russia said it attacked gas-compressor stations in western Ukraine with drones and missiles.

Benchmark futures rose by as much as 2.4% on Monday. The market has been sensitive to geopolitical events and outages this summer, even with storage sites exceeding targets ahead of Europe’s heating season.

Russian gas flows to Europe via Ukraine were expected to remain within their normal range on Monday, according to data from the Slovak gas transmission system operator Eustream, suggesting the attacks had not impaired deliveries.

Europe’s storage facilities are more than 91% full, according to the latest data from Gas Infrastructure Europe, crossing the EU’s 90% goal more than two months early. Those inventories have soothed markets in the face of supply risks, keeping gas futures below a 2024 high reached earlier this month.

Tanker carrying sanctioned Russian LNG tries ship transfer

A sanctioned liquefied natural gas (LNG) tanker appeared to be transferring its Russian cargo to another ship in the Mediterranean Sea, a sign of the lengths to which Moscow is going to circumvent US sanctions.

The Pioneer, which was sanctioned by the US on Friday, was anchored next to another vessel about 30km northeast of Egypt’s Port Said, according to satellite images. That was an indication that it was executing a so-called open-water ship-to-ship transfer, which is rare for natural gas. The recipient vessel is the New Energy, which isn’t subject to restrictions, according to TankerTrackers.com.

The cargo was the first to load from Arctic LNG 2, Russia’s newest gas export plant, which was sanctioned by the US last year. In response to the US actions, Moscow is developing a shadow fleet of LNG tankers in a similar way it did for transporting crude oil and products.

The US upped the ante last week by imposing restrictions on seven LNG carriers linked to Russia, including the Pioneer and Ocean Speedstar Solutions, the India-based manager of the ship.

Once the transfer is finished, New Energy may head through the Suez Canal to Asia, where there could be willing buyers of the Russian gas. It’s common practice for vessels carrying sanctioned energy to hide their location by switching off or manipulating their automatic identification systems.

Everest Energy, another vessel sanctioned by the US on Friday, was moving away from the Arctic LNG 2 facility in Russia, according to ship-tracking data, indicating that the vessel picked up a shipment. The ship was faking its location in the Barents Sea until Monday, the data indicated. DM