Russia is considering a law that might let its companies use “digital financial assets” for international payments. Even though cryptocurrencies like Bitcoin are used in Russian businesses, this law doesn’t specifically cover it.
The process of approval is moving quickly, with the first step completed in the parliament.
The State Duma Committee on Financial Markets supported changes to the draft law on February 21 as the bill has passed the first step in the lower parliamentary house and is now waiting for a second reading and possible approval by the Senate.
If approved, the proposed changes will permit “the use of digital assets in foreign trade transactions between residents of Russia and non-residents.” Russian traders could include these digital assets in contracts and transactions.
Russia’s relationship with cryptocurrencies is marked by both acceptance and restrictions. While cryptocurrencies are recognized as investment instruments, they are not fully accepted as a means of payment within the country.
Despite this limitation, Russia has shown interest in developing its own central bank digital currency (CBDC), called the Digital Ruble, which aims to improve the efficiency of the financial system and potentially provide an avenue to bypass international sanctions.
Furthermore, Russia and Iran have reportedly explored issuing a stablecoin backed by gold for foreign trade to potentially circumvent sanctions.
However, challenges exist in converting such stablecoins into more widely accepted fiat currencies due to liquidity issues and regulatory controls on major exchanges.
Following the bill, the term “digital financial assets” is now being refined to include digital fiats such as the digital ruble, regulated bank-issued stablecoins, digital securities, and commodities, as per Anatoly Aksakov, Chairman of the Committee.
Aksakov aims for prompt advancement of the bill, hoping for its second reading on February 27. He emphasized that allowing digital assets in foreign trade can benefit Russian importers and exporters in their dealings with friendly countries.
However, experts caution that technological barriers may impede the seamless integration of digital assets into international payments.
This development comes amid ongoing geopolitical tensions and Western sanctions, with Russia increasingly turning to digital solutions to navigate economic challenges.
Russia’s pursuit of a digital financial landscape is evident in projects like the digital ruble and collaborations with countries like Belarus and Kazakhstan in the central bank digital currency (CBDC) arena.
