Stablecoins as New Frontier: Russia Seeks Alternatives to Cross-Border Payment System

Stablecoins continue to witness significant adoption as the world’s largest country Russia investigates the use of stablecoins in international payments due to the growing financial crisis imposed on it by international sanctions and economic hardship.

The move seeks to avoid traditional financial channels, underscoring Russia’s strategic shift to digital assets as a way to preserve its global trading activities despite the country’s conflicts. Matthew Sigel, head of digital asset research at VanEck shared development of the X platform (formerly Twitter) on Wednesday, citing a piece of the announcement.

Russia Look To Stablecoin For Global Payments

It is noteworthy that stablecoins they are a form of crypto-currency that is intended to keep a fixed value linked to a store of assets, like traditional fiat currencies and gold. They provide a combination of the efficiency and flexibility of digital assets and the stability of traditional financial institutions.​

Due to the nature of these coins, Russian authorities believe that these assets are a promising tool for cross-border transactions, making the nation consider accepting stablecoins for its daily operations.

According to the deputy governor of the Bank of Russia, Alexei Guznov, current discussions are to develop measures to regulate the stablecoin. The purpose of this proposal is to create a legal framework for the collection and use of property border payments.

Guznov also indicated that the project may change from the experimental phase to the permanent control structure. However, setting a deadline for the completion of this project is still necessary while the central bank makes sure that any legal problems may arise due to sanctions and international finance. rules are avoided.

“This law can significantly affect the environment of Russian business dealing with international trade, especially with Asian countries,” added Guznov. As a result, Russia can bypass some of the restrictions imposed on the current financial system by using stablecoins, which are intended to hold assets and have a central issuer.

.RussiaThe idea of ​​accepting global payment coins has been a major discussion in the nation since 2023. Now, following the law passed by Vladimir Putin, the President of Russia, which authorizes the use of digital financial assets for global payments, the country can finally legalize the settlement of stablecoins.

Coins To See Significant Growth In Europe

The proposal comes as a result of growing discussions about the EU’s Markets in Crypto Assets (MiCA) legislation. The MiCA law highlights the growing importance of precise authorization in the field of digital assets, which is poised to become a historic regulatory framework for the cryptocurrency market.

Patrick Hansen, chief policy officer at The circlebe is given details on the impact of legislation on the stablecoin sector. According to Hanson, 1.1% of Euro-denominated crypto transactions are made using EUR-stablecoins, compared to 90% of USD-stablecoins. “It sounds funny, but 1.1% is actually higher than ever,” he added.

Although the number was zero a few years ago, Hansen believes it can only get bigger from here, and the introduction of MiCA will help make the volumes of EUR-stablecoins more attractive.

Featured image from iStock, chart from Tradingview.com