The Bank of Russia is examining the possibilities of using cryptocurrency stablecoins to facilitate cross-border payments owing to its transaction speed and lower fees. As the popularity of cryptocurrencies grows, institutions are exploring several beneficial use cases.
Bank of Russia Considers Stablecoin Option
In an interview with Izvestia, Alexey Guznov, State Secretary and Deputy Governor of the Bank of Russia, stated that the country’s central bank is contemplating the use of stablecoins for cross-border transactions. He said that the Bank is thinking about permitting a small number of accredited investors to utilize stablecoins for international money transfers. If a responsible entity is behind these stablecoins, they would be regarded under present legislation as digital financial assets (DFAs). Guznov clarified.
“Stablecoins could potentially be used for cross-border payments within the framework of digital asset regulation, as some of them qualify as DFAs,” he said.
He went on to say that stablecoins that are determined by an algorithm and lack a central authority are more like digital currencies. He pointed out that preliminary research would be necessary to determine whether using such stablecoins for cross-border settlements would be feasible given the existing regulatory environment.
Guznov also noted the recent enactment of a new regulation about cryptocurrency mining and its application in international trade. The law permits these transactions to be carried out through approved businesses in a regulatory sandbox.
“Now the task of adopting the regulatory sandbox program and other ancillary laws as soon as possible is being looked at,” he said.
During the trial stage, approved platforms will be used for cross-border digital currency settlements, to eventually open up participation to a small number of eligible investors.
It is important to note that the Russian government has been previously accused of exploiting cryptocurrency to avoid international sanctions imposed on it following its 2022 invasion of Ukraine.
Simultaneously, state-sponsored Russian hacker groups have been accused of frequently stealing millions of dollars worth of cryptocurrencies around the world.
