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Hit with severe sanctions, Russia is exploring stablecoins as an escape route from financial isolation. Being cut off from SWIFT makes it much more difficult for Russian companies and banks to conduct international financial transactions. Russian authorities are discussing the possibility of legalizing stablecoins for international settlements, according to a recent local media report. What Happened To The BRICS? The government and financial regulators see cryptocurrencies, particularly stablecoins, as potential solutions to streamline global trade for Russian companies currently under international sanctions. Proposals have been formulated, and the matter is under active consideration, as reported by Alexey Guznov, Deputy Chairman of the Central Bank. He added that the goal is to create a stablecoin-based system. “The question is to regulate the entire chain that would allow individuals to transfer these assets to the territory of the Russian Federation, accumulate them here, and use them for cross-border payments,” said Guznov, adding that this is a long-term plan, not a temporary fix. In March, President Vladimir Putin signed a law that allows use of DFAs for international payments. The use of these assets is still not widespread. Concerns about secondary sanctions and low liquidity of Russian DFAs remain. Here Comes USDT! While some stablecoins might resemble digital financial assets (DFAs) or cryptocurrencies, additional regulatory adjustments are necessary to facilitate their use in cross-border payments. Stablecoins and blockchain can enable transactions without relying on SWIFT or other traditional payment systems, which is becoming less relevant amid new Western restrictions. As reported, the initiative to use stablecoins for international settlements has been discussed since 2023, and a bill to regulate these experiments was developed in April. Previously, in January, a group of deputies proposed a bill to legalize a stablecoin tied to gold. Despite the promises, financial analysts are worried that transactions with stablecoins…

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Filed under: News - @ July 5, 2024 9:18 am