Russia to legalize stablecoins for international transactions

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Russia is considering legalizing stablecoins for international transactions to simplify cross-border payments for its companies. The Russian Central Bank is discussing proposals to allow stablecoins pegged to gold or the US dollar.

Reportedly, this could become a permanent regulation instead of a temporary experiment. Business representatives see this initiative as promising, especially for transactions with BRICS countries.

Economists believe this will ease international transactions for Russian companies under sanctions.

Stablecoins for business payments

Deputy Chairman of the Central Bank, Alexey Guznov, said that proposals have been formulated.  He explained that the goal is to regulate the entire chain that allows individuals to transfer these assets into Russia, accumulate them, and use them for international payments.

Guznov mentioned that these tokens are issued in foreign information systems. Stablecoins can resemble digital financial assets (DFA) or cryptocurrencies, so regulation needs to be tightened. Despite this, stablecoins are popular and adaptable to various needs.

“Understanding is still being formed, and I hope that in the near future it will be reflected in the text [of the bill].”

Guznov

The Ministry of Finance’s press service confirmed that the issue of allowing stablecoins for international settlements is being worked out. DFAs differ from stablecoins in that they have a specific issuer, like a security.

Currently, this instrument exists only in Russia. Russian DFAs are built on a closed blockchain and do not circulate on the external market, explained Oleg Ogienko, Director of Government Relations at BitRiver.

Stablecoins and DFAs can be used for cross-border settlements, a promising instrument, said Alexander Murychev, executive vice president of the Russian Union of Industrialists and Entrepreneurs (RSPP).

He believes these secured assets will bring a lot of liquidity to the market and allow the formation of a long-term resource.

Russia to legalize stablecoins for international transactionsHeadquarters of the Central Bank of Russian Federation in Moscow, Russia

In March 2024, President Vladimir Putin signed a law allowing the use of digital financial assets for international payments. However, the process has not yet begun. Murychev noted that foreign companies are afraid of the risks of secondary sanctions.

The topic of using cryptocurrencies for cross-border payments remains on the agenda. This idea has been discussed since 2023. In April, the State Duma developed a bill regulating the corresponding experiment.

Stablecoins have already become a popular payment instrument globally, said Alexander Potavin from FG Finam. In the first quarter of 2024 alone, the value of all transfers via such tokens reached $6.8 trillion, comparable to the turnover for the entire 2022 ($7 trillion).


Reporting by Jai Hamid

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