The Russian government is considering regulating the entire circulation process of stablecoins, including the domestic transfer, accumulation and use of these assets in cross-border payments.
The Russian government is considering officially legalizing stablecoins for international transactions in order to simplify cross-border payments for Russian businesses amid ongoing sanctions, Izvestia reported July 3, citing the Russian Central Bank.
It is reported that the Central Bank of the Russian Federation is actively evaluating a proposal to allow the use of crypto assets pegged to stable value assets such as the US dollar or gold, which have relatively low volatility and are more stable than other cryptocurrencies.
Stablecoins may be a potential solution for sanctions response strategies
Alexey Guznov, deputy chairman of the Central Bank of Russia, confirmed the government's plan to include stablecoins in the regulatory system and stressed the importance of regulating the entire process from domestic transfer and accumulation of assets to cross-border payments. He further explained that this measure is intended to be a long-term regulation rather than a short-term experiment. Guznov also mentioned that although stablecoins have something in common with digital financial assets (DFA) and other cryptocurrencies, due to their unique attributes and popularity, the existing regulatory framework needs to be appropriately adjusted.
The report points out that stablecoins, as a means of international settlement, show great potential, especially in transactions with BRICS countries (Brazil, Russia, India, China and South Africa). Therefore, some experts believe that stablecoins can inject a lot of liquidity and long-term funds into the market. At the same time, the Russian Union of Industrialists and Entrepreneurs (RSPP) also believes that stablecoins are a key tool to enhance cross-border transaction capabilities in the face of Western sanctions.
In March 2024, Russian President Vladimir Putin signed a law allowing DFA to be used for international payments. However, due to concerns about possible secondary sanctions, the implementation of this law has not yet been fully rolled out. At the same time, due to restrictions on convertibility and liquidity, Russia's DFA is not currently compatible with the global crypto market, which limits its application in international payments.
The limitations and potential of stablecoins in Russia
Stablecoins have become extremely popular in global transactions, with data showing that the transaction volume in the first quarter of 2024 reached $6.8 trillion, which is comparable to the transaction volume for the whole year of 2022. However, in Russia, the application of stablecoins is currently limited to specific plans of a few companies, especially transactions with China.
Experts believe that in order for stablecoin transactions to proceed smoothly, a clear regulatory system and solid infrastructure need to be established. This involves formulating clear rules for the cryptocurrency and mining industries and ensuring the legality and transparency of transactions.
If Russia legalizes stablecoin payments, it will be more widely used in Russian companies, including state-owned enterprises, which will simplify transaction processes and comply with tax regulations.
However, the EU recently imposed a new round of sanctions that prohibit European organizations from using Russia’s financial messaging system (SPFS), which is reportedly an alternative to SWIFT. In addition, Russia plans to disconnect from SWIFT in 2022, making the development of alternative payment mechanisms even more urgent.
Stablecoins offer a possible solution to help address these challenges by bypassing traditional financial systems such as SWIFT. #俄罗斯 #稳定币 #跨境支付 #合法化
Conclusion:
Amid global economic uncertainty, the Russian government is actively embracing financial innovation and exploring the regulation and legalization of stablecoins to meet the challenges of the international payment system. This move not only shows Russia's strategic response to economic sanctions, but also reflects its determination to enhance the autonomy of its financial markets.
With the gradual improvement of the regulatory framework and the construction of infrastructure, stablecoins are expected to establish a formal status in the Russian financial system and provide enterprises with efficient and low-cost cross-border payment solutions. This move will not only help Russian companies expand their international business, but may also provide new impetus for the development of global financial technology and open a new era of cross-border payments.
