Russia considers permanently legalizing stablecoins for cross-border payments
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Russia considers permanently legalizing stablecoins for cross-border payments
Stablecoins can bypass traditional systems like SWIFT and offer potential solutions.
Navigating Web3 tides with focused insightsSource: cryptoslate
Compiled by: Blockchain Knight
On July 3, Russian newspaper Izvestia reported, citing Russia's Central Bank, that the Russian government is considering formally legalizing stablecoins for international transactions to simplify cross-border payments for Russian companies under ongoing sanctions.
The report stated that the Central Bank of the Russian Federation (CBR) is actively discussing proposals to allow the use of these crypto assets—pegged to stable currencies or assets such as the U.S. dollar or gold—which are less volatile than other cryptocurrencies.
Alexey Guznov, Deputy Chairman of the Russian Central Bank, confirmed the initiative and emphasized that the primary focus would be on regulating the entire transaction chain—from transferring these assets into Russia to accumulating and utilizing them for cross-border payments.
Guznov said this could become a permanent regulation rather than a temporary trial.
He noted that while stablecoins share similarities with digital financial assets (DFAs) and other crypto assets, fine-tuning the regulatory framework will be crucial due to their unique characteristics and widespread adoption.
The report indicated that stablecoins are seen as a promising tool for international settlements, particularly in trade with BRICS nations—including Brazil, Russia, India, China, and South Africa.
Experts believe these assets could provide significant liquidity and long-term resources to the market. The Russian Union of Industrialists and Entrepreneurs (RSPP) also views stablecoins as an important instrument for strengthening cross-border transactions amid Western sanctions.
In March 2024, Russian President Vladimir Putin signed a law allowing the use of DFAs for international payments. However, implementation has not been fully realized due to concerns over secondary sanctions against foreign companies.
Moreover, Russia’s DFA system is currently incompatible with the global crypto asset market, limiting its use in international payments due to convertibility and liquidity issues.
Stablecoins have become a popular tool for global transactions. In the first quarter of 2024 alone, the total value of stablecoin transactions reached $6.8 trillion—nearly equivalent to the entire annual volume in 2022.
However, in Russia, the use of stablecoins is currently limited to individual corporate initiatives, with most companies using them primarily for trade with China.
Experts emphasize the need for a clear regulatory framework and robust infrastructure to support stablecoin transactions, including establishing "rules of the game" for crypto assets and mining to promote lawful and transparent operations.
If stablecoin payments are legalized, Russian enterprises—including state-owned companies—could widely adopt them, making such transactions more straightforward and compliant.
The European Union implemented its latest round of sanctions in June, prohibiting European entities from connecting to Russia’s SWIFT alternative—the System for Transfer of Financial Messages (SPFS).
Given this, along with Russia’s disconnection from SWIFT in 2022, the importance of developing alternative payment mechanisms has increased significantly.
Stablecoins can bypass traditional systems like SWIFT, offering a potential solution to these challenges.
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