Russia Considers Using Stablecoins for International Payments

Bittime - Russia is currently discussing the possibility of using stablecoins for international payments, as a strategic step to overcome Western sanctions and strengthen the country's financial system. 

Russia: Stablecoins for International Payments

Alexey Guznov, Deputy Chairman of the Russian Central Bank, revealed that a related proposal has been submitted and is currently being reviewed by the Ministry of Finance. The talks come amid reports that some Russian metal producers have started using USDT in transactions with trading partners in China.

However, Even though the proposal has been submitted, there are still several technical aspects that need to be resolved. This includes setting up a whole chain that allows individuals and companies to receive, store and use these digital assets to settle international payments.

According to the press service of the Ministry of Finance, this issue is being worked on and may be activated permanently, as happened with the approval of the digital financial assets (DFA) law passed in March. This shows the Russian government's seriousness in utilizing stablecoins to overcome obstacles faced in the international payment system.

Support from Various Parties in Russia

Various figures in Russia have expressed support for the use of stablecoins. Alexander Murychev, Executive Vice President of the Russian Union of Industrialists and Entrepreneurs, considers stablecoins very promising for international payments due to their flexibility and minimal volatility when making payments. 

The same goes for Natalia Milchakova, an analyst at Freedom Finance Global, who stated that transactions using stablecoins are difficult for third country regulators to track, making it attractive to make payments without worrying about being hit by secondary sanctions from Western countries.

Use of Stablecoins USDT in International Transactions

Reports in June indicated that two leading Russian metal producers had used USDT to pay and receive payments from trading partners in China. This shows that although still on a small scale, the use of stablecoins for international transactions has begun to take place.

Elvira Nabiullina, Governor of the Russian Central Bank, recently stated that the Russian Central Bank has softened its stance on the use of crypto for international payments. He encouraged use of crypto as a way to circumvent Western sanctions, as well as confirm the central bank's support for this initiative.

Benefits of Using Stablecoins

Stablecoins, which are tokens pegged to the value of an asset or other fiat currency (mostly the US dollar), have several advantages in cross-border payments, such as the following.

1. Minimal Volatility: Stablecoins have better price stability compared to other cryptocurrencies such as Bitcoin, thereby reducing the risk of drastic changes in value when making payments.
2. Transparency and Speed: Transactions using stablecoins can be carried out quickly and transparently, facilitating the international trade process.
3. Avoidance of Sanctions: Stablecoin transactions are difficult for third country regulators to track, allowing users to avoid secondary sanctions imposed by Western countries.

Stablecoin Transactions Require High Security

While there is a lot of potential in using stablecoins for cross-border payments, there are still several challenges that need to be overcome. This includes effective regulation and supervision of the entire stablecoin transaction chain to ensure the security and reliability of the payment system.

However, with commitment from the Russian Central Bank and support from various industry figures, there is hope that stablecoins can be an effective solution to overcome the obstacles faced in Russia's international payments system. If successful, this would be a significant step in strengthening the country's financial system and opening up new opportunities in international trade.

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