Stablecoins continue to enjoy remarkable popularity. Russia, the world’s largest country, is exploring the use of stablecoins for international payments amid growing financial pressures from international sanctions and economic problems.
The move seeks to bypass traditional financial channels, underscoring Russia’s strategic transition to digital assets as a way to maintain its global trading presence amid ongoing geopolitical tensions. Matthew Sigel, head of digital asset research at VanEck shared the development on the X (formerly Twitter) platform on Wednesday, citing part of the announcement.
Russia Looks to Stablecoin for Global Payments
It is worth noting that stable coins are a type of cryptocurrency that aims to maintain a consistent value tied to a reserve of assets, such as conventional fiat currencies and gold. They offer a combination of the efficiency and flexibility of digital assets with the stability of conventional financial institutions.
Due to the nature of these coins, Russian authorities believe that these assets are a promising tool for cross-border transactions. Therefore, the country is considering accepting stablecoins for its daily operations.
According to the deputy governor of the Bank of Russia, Alexei Guznov, the current negotiations are intended to develop regulatory measures for stablecoins. The aim of this proposal is to create a legal framework for the collection and use of the assets in cross-border payments.
Guznov further pointed out that this project could move from an experimental phase to a more permanent regulatory structure. However, setting a deadline for the completion of the project is still necessary, while the central bank ensures that potential legal issues arising from sanctions and international financial laws are avoided.
“The regulation could have a major impact on Russian businesses dealing with international trade, especially with Asian countries,” Guznov added. As a result, Russia could circumvent some of the restrictions imposed by sanctions on the current financial systems by using stablecoins, which are focused on reserve assets and have a central issuer.
RussiaThe idea of using the coins for global payments has been a major topic of discussion in the country since 2023. Now, following the law passed by Vladimir Putin, the President of Russia, authorizing the use of digital financial assets for global payments, the country can finally legalize stablecoin settlements.
The Coins That Will See Significant Growth in Europe
This proposal comes in light of the growing discussion around the EU Markets in Crypto Assets Act (MiCA). The MiCA law highlights the growing importance of precise jurisdiction in the field of digital assets, which is poised to become a historic regulatory framework for the cryptocurrency market.
Patrick Hansen, a senior policy officer at Circlehas offered insights into the law’s impact on the stablecoin sector. According to Hanson, 1.1% of euro-denominated crypto transactions are conducted with EUR stablecoins, compared to 90% for USD stablecoins. “It sounds funny, but 1.1% is actually an all-time high,” he added.
While the number was zero a few years ago, Hansen believes it can only get bigger. The introduction of MiCA will make the volumes and liquidity of EUR stablecoins more attractive.
Main image from iStock, chart from Tradingview.com