Russia is reportedly considering legalising the use of stablecoins for international payments, signalling a shift towards blockchain technology for cross-border transactions.
Since Russia’s invasion of Ukraine in 2022, Western countries have imposed significant financial sanctions on Russia. These restrictions include cutting off major Russian banks from the international SWIFT payment system, freezing Russian assets abroad, and banning certain financial transactions. The aim is to isolate Russia economically and apply pressure to end its aggression in Ukraine. All these things forced Russian government agencies to move toward other alternative & best payment methods.
According to a new report by Russian state publication Izvestia, Russia is looking to legalise the use of stablecoins to facilitate cross-border payments. The report, however, did not specify the types of stablecoins under consideration by the Russian government.
Alexei Guznov, the Deputy Chairman of Russia’s Central Bank, informed Izvestia that the proposals to legalise blockchain technology powered stablecoins have been in formulation and discussion since 2023. Guznov emphasised that regulations will likely need to be tightened to safeguard the nation’s interests.
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In the current geopolitical climate, with extensive financial sanctions imposed by Western countries, Russia is exploring alternative payment methods. Stablecoins, a type of cryptocurrency designed to maintain a stable value, are emerging as a top option for Russia. The use of blockchain technology, which underpins stablecoins, offers a decentralised and secure framework for international transactions, potentially bypassing traditional financial systems that are subject to sanctions.
By considering the legalisation of stablecoins, Russia aims to leverage the advantages of blockchain technology to maintain and enhance its international trade capabilities.
Russia’s move reflects the broader global trend of incorporating digital currencies and blockchain solutions into financial systems, especially under restrictive conditions.
Russian central bank vs Crypto
The Bank of Russia, the central bank of the Russian Federation, is a long-term opponent of cryptocurrencies. The central bank has consistently been against the adoption or circulation of cryptocurrencies within Russia’s jurisdiction. On numerous occasions, the Bank of Russia has proposed banning cryptocurrencies in the country, similar to China’s blanket ban on crypto.
Read also: Ethereum Surges 100% Against Bitcoin in Annual Revenue from Transaction Fees
Russia Eyes Stablecoins for Cross-Border Payments in Bold Blockchain Move
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